Markets are softer to start the day with corn and wheat down 2-3 and soybeans up 2.
Reuters released trade estimates yesterday for next Tuesday’s Planting Intentions and Quarterly Grain Stocks reports from USDA. The trade projects corn acreage to be 94.3M acres, soybean acreage at 84.9M acres, and wheat acreage just shy of 45M acres. Corn stocks are expected to fall 5.7% from March 2019 while soybean stocks are projected 17.8% lower than year ago. Both should be considered neutral/friendly
Valero announced that it was declaring force majeure at two of its plants (Albert City Iowa & Albion, Nebraska) that would allow them to not have to honor their producer price contracts for corn and DDGs made at both plants. Valero stated that all of its storage tanks are full and that it cannot continue operations.
Ethanol plants that are still running are seeing losses on the grind over $0.80 a bushel. This story will continue across the Midwest as the ethanol industry comes to grips with Americans who are driving less and a crude oil price war between Saudi Arabia and Russia.
The ethanol plant closures will certainly be problematic and make the uphill climb out of the basement here just that much more difficult for producers that are sitting on unpriced corn and a crop that will not store well. Add on the potential for a 94+ million acre crop that will be put in the ground in the next few weeks and things look bleak.
Have a Safe Day!