While export demand has been slow or at least slow to be reported for the last couple weeks, the domestic demand has remained steady on the ethanol front. U.S. ethanol production for the week ended January 11th averaged 1.051 mil barrels per day (up 5.10% versus a week ago, down 0.94% versus a year ago); stocks totaled 23.351 mil barrels (up 0.42% versus a week ago, up 2.67% versus last year); corn use for the week was 108.5 mil bu (103.2 mil last week and versus the 107.5 mil bu needed to meet USDA projections).
Andrew Wheeler the acting administrator for the Environmental Protection Agency said a rule to allow sales of higher-ethanol blends of gasoline year-round is being delayed by a partial government shutdown.
U.S. Secretary of Agriculture Sonny Perdue announced that many Farm Service Agency (FSA) offices will reopen temporarily in the coming days to perform certain limited services for farmers and ranchers. The U.S. Department of Agriculture (USDA) has recalled about 2,500 FSA employees to open offices on Thursday, January 17 and Friday, January 18, in addition to Tuesday, January 22, during normal business hours. The offices will be closed for the federal Dr. Martin Luther King, Jr. holiday on Monday, January 21. Reopened FSA offices will only be able to provide the specifically identified services while open during this limited time.
Services that will not be available include, but are not limited to:
• New direct or facility loans.
• New Farm loan guarantees.
• New marketing assistance loans.
• New applications for Market Facilitation Program (MFP).
• Certification of 2018 production for MFP payments.
• Dairy Margin Protection Program.
• Disaster assistance programs, such as:
• Livestock Indemnity Program.
• Emergency Conservation Program.
• Wildfires and Hurricanes Indemnity Program.
• Livestock Forage Disaster Program.
• Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish.
Producers with old crop corn to move before spring planting should be making sales with the forecast for no significant moves higher between now and spring. I would look to make sales prior to the March 29th planting intentions report. Producers that typically move grain in the mid-summer months should be making cash sales with current prices in the $3.65-3.70 range and lock in basis on a good portion on their remaining bushels. US Carryout of corn is going to be large again this year which will make current levels look very attractive.
Corn quality has also been an issue this year with higher levels of toxins in this year’s crop. Higher vomitoxin levels have resulted in many Midwestern producers scrambling to find a market for their grain as many ethanol plants and livestock producers have been discounting or rejecting loads with higher levels. Producers should be pulling grain out of their bins on a regular basis to monitor quality and prevent increased contamination of any toxins. Lighter test weight and poorer quality grain should not be stored into the summer months.
Have a Safe Day!