Wheat Outlook at the 2019 KSU Risk and Profit Conf. – Some promising demand for exports and feed use with strong basis, but falling HRW Wheat futures (4th of 4)

The following slides are part of the presentation on “Grain Market Outlook for Years 2019-2020” given at the 2019 Risk and Profit Conference in sponsored by the Kansas State University Department of Agricultural Economics in Manhattan, Kansas.  The whole presentation are available on the KSU www.AgManager.info website at the following web address:

http://www.agmanager.info/events/risk-and-profit-conference/previous-conference-proceedings/2019-risk-and-profit-conference-0

This forth of 4 sets of slides covers the Wheat market (slides 85-118).  This follows an Introductory section (slides #1-23), Feedgrain Outlook (slides 23-58), and Soybean Outlook (slikdes 59-84) covered in earlier posts.

Soybean Outlook at the 2019 KSU Risk and Profit Conf. – Projecting 50%-50% Probability of a 48.5 bu/ac (USDA) vs 46.5 bu/ac (KSU), 3.68 (USDA) vs 3.53 billion bu. 2019 U.S. Prodn, with $8.40 (USDA) vs $9.00 /bu Prices (3rd of 4)

The following slides are part of the presentation on “Grain Market Outlook for Years 2019-2020” given at the 2019 Risk and Profit Conference in sponsored by the Kansas State University Department of Agricultural Economics in Manhattan, Kansas.  The whole presentation are available on the KSU www.AgManager.info website at the following web address:

http://www.agmanager.info/events/risk-and-profit-conference/previous-conference-proceedings/2019-risk-and-profit-conference-0

This third of 4 posts or sets of slides covers the Soybean market (slides 59-84).  This follows an Introductory section (slides #1-23) and Feedgrain Outlook (slides 23-58) covered in an earlier post, with info for Wheat markets to be presented in a following post.

Corn and Sorghum Outlook at the 2019 KSU Risk and Profit Conf. – Projecting 70% Probability of a 12.5-12.9 billion bu. 2019 U.S. Corn Crop, with => $4.00 /bu Corn (2nd of 4)

The following slides are part of the presentation on “Grain Market Outlook for Years 2019-2020” given at the 2019 Risk and Profit Conference in sponsored by the Kansas State University Department of Agricultural Economics in Manhattan, Kansas.  The whole presentation are available on the KSU www.AgManager.info website at the following web address:

http://www.agmanager.info/events/risk-and-profit-conference/previous-conference-proceedings/2019-risk-and-profit-conference-0

This second of 4 posts or sets of slides covers the Feedgrain market (Corn & Grain Sorghum – slides 24-58).  This follows an Introductory section (slides #1-23) covered in an earlier post, with info for Soybeans and Wheat markets to be presented in following posts.

Grain Outlook at the 2019 KSU Risk & Profit Conference – Prevailing Issues in U.S. Grain Markets, Including 2019 Acreage Issues (1st of 4)

The following slides are part of the presentation on “Grain Market Outlook for Years 2019-2020” given at the 2019 Risk and Profit Conference in sponsored by the Kansas State University Department of Agricultural Economics in Manhattan, Kansas.  The whole presentation are available on the KSU www.AgManager.info website at the following web address:

http://www.agmanager.info/events/risk-and-profit-conference/previous-conference-proceedings/2019-risk-and-profit-conference-0

This first of 3 posts or sets of slides cover the Introductory section (slides #1-21).   Feedgrain market (Corn and Grain Sorghum) information, and info for Soybeans and Wheat markets will be presented in following posts.

U.S. Ethanol and Biodiesel Markets and Profits – Net Losses for Ethanol & Biodiesel Plants in July 2019

A. Ethanol Price and Profitability Trends

By Iowa State University model estimates, ethanol plants in Iowa and other Midwest states were operating at losses of ($0.22 /gallon) losses in July, with estimated losses of ($0.25 /gallon) in June 2019.

During the July 1-26, 2019 period, corn input purchase prices for Iowa ethanol plants averaged $4.29 /bu – compared to $4.17 in June, and $3.63 1/2 /bu in May.  Selling prices of distillers dried grains (DDGS) (10% moisture) averaged $134.18 /ton during July 1-26, up from $130.53 /ton in June, and up from 118.63 /ton in May. The selling price of ethanol via tank car and truck shipment out of Iowa ethanol plants has averaged $1.47 /gallon during July 1-26, up marginally from $1.46 /gallon in June, and from $1.25 /gallon in May.

Overall, during the July 1-26, 2019 time frame, the estimated cost of production of a representative ethanol plant in Iowa has averaged $1.72 per gallon – comparable to $1.69 in June, $1.53 per gallon in May, and $1.43 in April.  This has lead to an estimated average negative net return of minus $0.25 per gallon produced so far in July 2019, with is comparable to losses of $0.22 /gallon in June and losses of $0.27 /gallon in May 2019.

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B. Ethanol Production & Stocks Trends

Since the beginning of the “old crop” 2018/19 marketing year (MY) for U.S. corn on September 1, 2018, U.S. ethanol production has averaged 1.036 million barrels per week over 46 weeks. At this average pace, U.S. ethanol production would reach 15.878 billion barrels in “current” MY 2018/19.  Further, at a rate of 2.83 gallons of ethanol per bushel of feedgrain used for ethanol production (corn and/or grain sorghum), at total of 5.611 billion bushels of feedgrains would be used for ethanol production in the current marketing year.

The USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) report on June 11, 2018 have a more conservative, cautious perspective.  In the July WASDE report the USDA projected that in current MY 2018/19 a total of 5.500 billion bushels (bb) of U.S. corn would be used for ethanol production, and that 100 million bushels (mb) of U.S. grain sorghum would be used for Food, Seed, and Industrial (FSI) uses – which is primarily industrial ethanol production.

United States’ ethanol stocks had declined moderately during April-June from historically high levels in March 2019 – which had been burdening the ethanol market and having a negative impact on U.S. ethanol prices.  Now again in July U.S. ethanol stocks have increased – leading to larger corn supply-demand balances, and together with higher priced corn inputs are pressuring the profitability of U.S. ethanol plants.

C. Biodiesel Price & Profitability Trends

Reductions have also occurred in the estimated profitability of Biodiesel plants in Iowa and nearby states – although the losses are comparatively small relative to ethanol producing facilities during the July 1-26, 2019 period.

By Kansas State University estimates, during the July 1-26, 2019 period, soybean oil input purchase prices for Iowa biodiesel plants averaged $28.03 per cwt – up from an average price $27.64 /cwt in June 2019.   This occurred while Biodiesel selling prices averaged $2.81 /gallon during 7/1-30/2019, being up from $2.72 /cwt in May.

Also during the July 1-30 period, the cost of production at representative biodiesel plants in Iowa has averaged $2.85 per gallon – up from $2.75 per gallon June, and from $2.70 /gallon in May.  As a result, net returns of this representative soy biodiesel plant is Iowa during July were estimated a loss of $0.04 per gallon produced.  This is comparable to a projected monthly average loss of $0.03 per gallon in June, and profits of $0.09 /gallon during the May 2019 period. 

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Following are some graphics on U.S. Ethanol and Biodiesel Market price and profitability trends in the , which will soon be available on the KSU AgManager website:  http://www.agmanager.info/

The full presentation titled “U.S. Ethanol & Biodiesel Market Situation” made for WILL (Illinois Public Radio) on Tuesday, July 30, 2019 and will be located at the KSU AgManager.info website – at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

 

Following are the graphics of this presentation.

U.S. Ethanol and Biodiesel Markets and Profitability – Financial Losses for Ethanol and Biodiesel Plants in June to Date

A. Ethanol Price and Profitability Trends

By Iowa State University model estimates, ethanol plants in Iowa and other Midwest states were operating at losses of $0.22 /gallon losses in May and so far in June 2019.

During the June 1-21, 2019 period, corn input purchase prices for Iowa ethanol plants averaged $4.12 /bu – compared to 3.63 1/2 /bu in May.  Selling prices of distillers dried grains (DDGS) (10% moisture) averaged $129.87 /ton during June 1-21, up from $120.81 /ton a month earlier. The selling price of ethanol via tank car and truck shipment out of Iowa ethanol plants has averaged $1.45 /gallon during June 1-21, up from $1.294 /gallon in May.

Overall, during the June 1-21, 2019 time frame, the estimated cost of production of a representative ethanol plant in Iowa has averaged $1.66 per gallon – comparable to $1.52 per gallon in May, and $1.42 in April.  This has lead to an estimated average negative net return of minus $0.22 per gallon produced so far in June 2019, with is comparable to losses of $0.22 /gallon in May and losses of $0.12 /gallon in April 2019.

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B. Ethanol Production & Stocks Trends

Since the beginning of the “current” 2018/19 marketing year (MY) for U.S. corn on September 1, 2018, U.S. ethanol production has averaged 1.033 million barrels per week over 41 weeks. At this average pace, U.S. ethanol production would reach 15.832 billion barrels in “current” MY 2018/19.  Further, at a rate of 2.83 gallons of ethanol per bushel of feedgrain used for ethanol production (corn and/or grain sorghum), at total of 5.594 billion bushels of feedgrains would be used for ethanol production in the current marketing year.

The USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) report on June 11, 2018 seem to account for this.  In the June WASDE report the USDA projected that in current MY 2018/19 a total of 5.500 billion bushels (bb) of U.S. corn would be used for ethanol production, and that 100 million bushels (mb) of U.S. grain sorghum would be used for Food, Seed, and Industrial (FSI) uses – which is primarily industrial ethanol production.

United States’ ethanol stocks have declined moderately during April-June from historically high levels in March 2019 – which had been burdening the ethanol market and having a negative impact on U.S. ethanol prices.  Growing in U.S. ethanol stocks over the last few marketing years had led to much lower U.S. ethanol prices through mid-May 2019.  However, concerns about 2019 U.S. corn production and ethanol availability prospects, and strengthening seasonal demand for U.S. gasoline has caused ethanol and gasoline prices overall to increase from mid-May to highs in early June 2019.

C. Biodiesel Price & Profitability Trends

Reductions have also occurred in the estimated profitability of Biodiesel plants in Iowa and nearby states – although the losses are comparatively small relative to ethanol producing facilities during the June 1-21, 2019 period.

By Kansas State University estimates, during the June 1-21, 2019 period, soybean oil input purchase prices for Iowa biodiesel plants averaged $27.56 per cwt – down from an average price $28.08 /cwt in May 2019.   This occurred while Biodiesel selling prices averaged $2.70 /gallon during 6/1-21/2019, being down from $2.80 /cwt in May.

Also during the June 1-21 period, the cost of production at representative biodiesel plants in Iowa has averaged $2.74 per gallon – up from $2.71 per gallon May.  As a result, net returns of soy biodiesel product were a loss of $0.04 per gallon produced.  This is comparable to monthly average profits of $0.09 /gallon during the May 2019 period. 

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Following are some graphics on U.S. Ethanol and Biodiesel Market price and profitability trends in the , which will soon be available on the KSU AgManager website:  http://www.agmanager.info/

The full presentation titled “U.S. Ethanol & Biodiesel Market Situation” made for WILL (Illinois Public Radio) on Tuesday, June 25, 2019 and will be located at the KSU AgManager.info website – at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

 

Following are the graphics of this presentation.

U.S. Ethanol and Biodiesel Markets and Profitability – Moderate Losses for Ethanol and Biodiesel in April to Date

A. Ethanol Price and Profitability Trends

By Iowa State University estimates, ethanol plants in Iowa and other Midwest states were operating at losses of $0.10 to $0.23 per gallon from September 2018 through March 2019 – with $0.14 /gallon losses in March 2019.  By Kansas State University calculations, these losses extended into the April 1-19 period, with losses of $0.12 / gallon.

During the April 1-19, 2019 period, corn input purchase prices for Iowa ethanol plants averaged $3.47 /bu – compared to 3.55 /bu in March.  Selling prices of distillers dried grains (DDGS) (10% moisture) averaged $138.17 /ton during April 1-19, up from $135.77 /ton a month earlier. The selling price of ethanol via tank car and truck shipment out of Iowa ethanol plants has averaged $1.29 /gallon during April 1-19, down from $1.3086 /gallon in March.

Overall, during the April 1-19, 2019 time frame, the estimated cost of production of a representative ethanol plant in Iowa has averaged $1.41 per gallon – comparable to $1.45 per gallon in March, and $1.44 in February.  This has lead to an estimated average negative net return of minus $0.12 per gallon produced so far in April 2019, with is comparable to losses of $0.14 /gallon in March and losses of $0.23 /gallon in February 2019.

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B. Ethanol Production & Stocks Trends

Since the beginning of the “current” 2018/19 marketing year (MY) for U.S. corn on September 1, 2018, U.S. ethanol production has averaged 1.026 million barrels per week over 32 weeks. At this average pace, U.S. ethanol production would reach 15.730 billion barrels in “current” MY 2018/19.  Further, at a rate of 2.83 gallons of ethanol per bushel of feedgrain used for ethanol production (corn and/or grain sorghum), at total of 5.558 billion bushels of feedgrains would be used for ethanol production in the current marketing year.

The USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) report on April 9, 2018 seem to account for this.  In the April WASDE report the USDA projected that in current MY 2018/19 a total of 5.500 billion bushels (bb) of U.S. corn would be used for ethanol production, and that 100 million bushels (mb) of U.S. grain sorghum would be used for Food, Seed, and Industrial (FSI) uses – which is primarily industrial ethanol production.

However, the pace or weekly rate of U.S. ethanol production has slowed marginally during February – April 2019 (to date) compared to the September 2018 through January 2019 period.  For September 2018 through January 25, 2019, U.S. ethanol production averaged 1.034 billion barrels per week, while that rate slowed 3.1% to 1.004 per week for the weeks ending February 1st through April 12th.

At the same time U.S. ethanol stocks have remained at historically high levels – burdening the ethanol market and having a negative impact on U.S. ethanol prices.  To explain, for the “current” 2018/19 marketing year period from September 1, 2018 through the week ending April 12th, U.S. ethanol stocks have averaged 23.463 million barrels (mln brls) per week.  This compares to average end of week ending stocks for previous U.S. corn marketing years of 22.201 mln brls per week in “old crop” MY 2017/18; 21.259 mln brls per week in MY 2016/17; 20.846 mln brls in MY 2015/16; 19.466 mln brls in MY 2014/15; 16.618 mln brls per week in MY 2013/14; 18.104 mln brls per week in MY 2012/13; 19.569 mln brls per week in MY 2011/12; and 18.416 mln brls per week in MY 2010/11.  These data show the growing in U.S. ethanol stocks over the last few marketing years, and highlight the record size of U.S. ethanol supplies that burden the U.S. ethanol market at the present time.

C. Biodiesel Price & Profitability Trends

Reductions have also occurred in the estimated profitability of Biodiesel plants in Iowa and nearby states – although the losses are comparatively small relative to ethanol producing facilities during the April 1-19, 2019 period.

By Kansas State University estimates, during the April 1-19, 2019 period, soybean oil input purchase prices for Iowa biodiesel plants averaged $28.40 per cwt – down from an average price $29.13 /cwt in March 2019.   This occurred while Biodiesel selling prices averaged $2.77 /gallon during 4/1-19/2019, being down from $2.87 /cwt in March.

Also during the April 1-19 period, the cost of production at representative biodiesel plants in Iowa has averaged $2.81 per gallon – down from $2.86 per gallon March.  As a result, net returns of soy biodiesel product were down $0.05 /gallon, with a loss of $0.04 per gallon produced.  This is comparable to monthly average profits of $0.01-$0.02 /gallon during the January-March 2019 period. 

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Following are some graphics on U.S. Ethanol and Biodiesel Market price and profitability trends in the , which will soon be available on the KSU AgManager website:  http://www.agmanager.info/

The full presentation titled “U.S. Ethanol & Biodiesel Market Situation” made for WILL (Illinois Public Radio) on Tuesday, April 23, 2019 and will be located at the KSU AgManager.info website – at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

 

Following are the graphics of this presentation.