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A Quick Look At The September WASDE Numbers

Posted on Sep 14, 2017 in Biodiesel, Vegetable Oil, and Grain

Soybean yield per harvested acre increased by 0.5 bushels for the 2017/18 crop year, moving from 49.4 bushels per acre to 50.  This bumped production/supply higher by 50 million bushels. However, there was no increase to ending stocks since exports were forecast 25 million bushels higher and beginning stocks were reduced by 25 million bushels.   Crush expectations for the 2016/17 crop year were increased from 1.89 billion bushels to 1.895 billion.  2016/17 soybean exports were also raised by 20 million bushels to 2.17 billion. 2017/18 crush expectations remain unchanged at 1.940 billion bushels, a 2.37% increase from the 2016/17 crush forecast.

Soybean oil saw numerous adjustments made to both the 2016/17 estimated numbers and the 2017/18 crop year projections.  For the 2016/17 crop year, soybean oil production was increased by 95 million pounds.  This was more than offset by biodiesel production running stronger than forecast and domestic disappearance being greater than anticipated.  Each category is now projected to use 50 million pounds more.  Biodiesel consumption is forecast at 6.05 billion pounds, while ‘food/feed/other’ is projected at 13.65 billion.  Exports were also raised 150 million pounds.  These adjustments brought a forecasted reduction of 155 million pounds to 2016/17 crop season ending stocks.  The 2017/18 soybean oil productions started with the previously calculated 155-million-pound reduction to ending stocks.  Due to the countervailing duties imposed on Argentina and Indonesian biodiesel, domestic biodiesel production is now forecast much higher and a corresponding addition of 550 million pounds of soybean oil demand is projected by the biodiesel industry.  This increased projected use to 7 billion pounds.  Partially offsetting the increased biodiesel demand is 200-million-pound demand reduction from the export market and a 20-million-pound reduction in domestic disappearance other than biodiesel.  These changes have led to 2017/18 ending stocks being forecast 305 million pounds lighter, at 1.757 billion pounds.

2016/17 corn estimated ending stocks were forecast 20 million bushels lower, at 2.35 billion bushels.  This reduction stems from a 70 million bushel increase in export demand.  2016/17 exports are now projected to be 2.295 billion bushels.  Partially offsetting the increased export demand was reductions in domestic use, including a 15-million-bushel reduction in ethanol production demand.  2017/18 crop year projections started with a projected yield increase of 4 tenths of bushel per harvested acre, pushing projections to 169.9 bushels per acre. This led to increased production projections of 31 million bushels, which more than offset the 20 million bushel decrease to beginning stocks. Domestic foo, feed and industrial use was lower.  This included a 25-million-bushel reduction in ethanol corn demand due to lowered export projections. With supply rising and use falling, corn ending stocks are forecast 62 million bushels higher from last month for the 2017/18 crop season.

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Ethanol Production Was Off 1.23% Compared To The Week Prior

Posted on Sep 14, 2017 in Animal Fats & Oils

Trading in the tallow market was very quiet today with no action reported. CWG trading was steady, $0.2800 – 0.2875. Sources reported that truck interest is very strong and while there is Chicago rail interest at $0.3150, buyers can’t find an offer.

Yellow grease trading was up a ½ cent of the NY market, $0.2750. KS/TX trading was up a ½ cent from the previous low, $0.2750 – 0.2850.

Ethanol production was off 1.23% compared to the week prior with the EIA pegging output at 1.047 mil bbl/day for the week ending 9/8. RFS eligible output is estimated at 6.792 mil lbs/day for the week, off the same percentage as ethanol. Sources have suggested that production will start to slow as plants take down time in late September and October. Trading today was consistent with yesterday’s action with values reported $0.2950 – 0.3000 FOB Mo. River and Illinois action reported $0.3000 – 0.3050 for Oct and Nov. Manly trading was done at $0.3100 delivered. Biodiesel appears to be gearing up for a hard run through the end of the year with a big gap in demand created from the Argentine duties, both the US imposition and the EU relaxation of.

Figure 1.

Table 1.

Please contact Ryan Standard at 563.223.9021 or ryan@thejacobsen.com with any questions, comments or trading.

Broiler-Type Eggs Set in the United States Up 4 Percent

Hatcheries in the United States weekly program set 218 million eggs in incubators during the week ending September 9, 2017, up 4 percent from a year ago. Hatcheries in the 19 State weekly program set 209 million eggs in incubators during the week ending September 9, 2017, up 4 percent from the year earlier. Average hatchability for chicks hatched during the week in the United States was 83 percent. Average hatchability is calculated by dividing chicks hatched during the week by eggs set three weeks earlier.

Broiler-Type Chicks Placed in the United States Up 3 Percent

Broiler growers in the United States weekly program placed 182 million chicks for meat production during the week ending September 9, 2017, up 3 percent from a year ago. Broiler growers in the 19 State weekly program placed 174 million chicks for meat production during the week ending September 9, 2017, up 2 percent from the year earlier. Cumulative placements from the week ending January 7, 2017 through September 9, 2017 for the United States were 6.53 billion. Cumulative placements were up 2 percent from the same period a year earlier.

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U.S. Export Sales & Shipments for Week Ending September 7

Posted on Sep 14, 2017 in Hide & Leather

USDA Hides and Skins Report

Net sales of 492,300 pieces reported for 2017, all whole cattle hides were up noticeably from the previous week and up 40% from the prior four-week average. Increases were primarily for China (370,900 pieces), South Korea (78,000 pieces), Thailand (24,000 pieces), Mexico (9,300 pieces), and Japan (3,400 pieces). Reductions were reported for Taiwan (300 pieces). Exports of 401,300 pieces reported for 2017, all whole cattle hides, were up 3% from the previous week and 5% from the prior four-week average. Exports were primarily to China (287,200 pieces), South Korea (67,500 pieces), Mexico (22,800 pieces), Thailand (8,900 pieces), and Taiwan (6,300 pieces).

Net sales of 154,800 wet blues for 2017 were up 21% from the previous week, but down 16% from the prior four-week average. Increases were reported for Italy (43,300 unsplit), China (38,700 unsplit), Vietnam (23,000 unsplit and 13,600 grain splits), and Mexico (29,600 grain splits and 200 unsplit). Reductions were reported for Thailand (300 unsplit).  Exports of 113,300 wet blues for 2017 were down 32% from the previous week and 34% from the prior four-week average. The primary destinations were Italy (25,500 unsplit and 3,200 grain splits), Vietnam (24,800 unsplit), China (20,700 unsplit), and Mexico (8,800 grain splits and 4,800 unsplit). Net sales of splits totaling 273,900 pounds for 2017 resulted as increases for Vietnam (266,700 pounds) and South Korea (32,000 pounds), were partially offset by reductions for China (24,800 pounds). Exports of 294,100 pounds for 2017 were up noticeably from the previous week and from the prior four-week average. The destinations were China (240,100 pounds), Taiwan (50,000 pounds), and South Korea (4,000 pounds).

Link to Complete USDA Report:  EXPORT-SALES/HIDESFAX

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Weekly LCFS Credit Trading

Posted on Sep 14, 2017 in Biodiesel, Vegetable Oil, and Grain

Weekly LCFS Credit Trading

Trading of LCFS credits during the week ending Sep 10th increased 2.2%.  Per California’s Air Resource board (CARB), 211,900 credits traded between Sept 4th and Sep 10th.  This is up 4,530 credits week over week and the fourth highest weekly volume seen this year. The trading activity during the week raised the year’s weekly average from 108,447 to 111,320 credits weekly.

CARB data shows that the price range the credits traded in held very close to what was seen the week before.  Credits traded between $70.00 and $95.00, with the average price being $88.84. The prior week saw a range of $71.00 and $97.00, with an average price of $88.83.  There were 20 transfers recorded during the week, 12 fewer than were recorded during the prior week but 5 more than the 2017 weekly average of 14 transfers per week.

The average CARB credit trading price is in line with the range outside brokers had been indicating the market to be over the same time frame. CARB’s weekly report excluded 5 transfers involving 22,636 credits that traded at, or near, zero in price. CARB only includes transfers that were completed in the given week.  Any transfers proposed and still pending confirmation are excluded.

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