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The Closing Numbers

Posted on Oct 18, 2017 in Biodiesel, Vegetable Oil, and Grain

In somewhat of a rare occurrence, heating oil and soybean oil finished the day unchanged.  Leaving the BOHO spread at 69 cents per gallon.  Opposition to Scott Pruitt seems to be growing as a group of Senators had lunch with him in an effort to back him off his opposition to the RFS. According to Senator Grassley, the meeting he is spearheading, will get Pruitt and the EPA “back on track”.  Senator Tammy Duckworth contributed to an opinion piece published by the Hill, which outlines some of the Trump administration’s efforts to undermine the biofuels industry through actions, while attempting to publically appease rural constituents.

The RINs market seemed to follow HO and SBO. Values and finished the day largely unchanged across the board.  California’s LCFS credit edged higher though, as bids moved up to 93 and offers to 95.  94 traded earlier in the day.

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Bean Oil Rallies as Bullish Sentiment Follows WASDE Report

Thursday’s WASDE report released by the USDA, generated bullish sentiment, and helped prices gain traction.  Declining yields, was described as the catalyst for the estimated drop in production which allowed prices to move higher. The most recent commitment of trader’s report showed that hedge funds were poised for a move higher ahead of the WASDA report.

Bean oil prices moved higher on Monday, following a surge higher on Friday, as bullish sentiment perpetuated in the wake of the WASDA report. U.S. oilseed production for 2017/18 is now projected at 132.3 million tons, lower by 0.5 million from last month.  Soybean production is forecast at 4,431 million bushels, flat from last month with higher harvested area offsetting lower yields. Global oilseed production for 2017/18 is projected at 577.0 million tons, down 1.6 million as reductions for soybeans. Some of the decline was offset by replacements from competing oils.

Since the latest CFTC report is released for the date ending October 10, (last Tuesday) and the WASDE report was on October 12, (last Thursday), bullish sentiment will likely be reflected in next week’s report. What we can garner from the latest report is that hedge funds were long futures and options, and although there was some profit taking, which reduced last week’s open interest in the managed money space by 2.7K contracts. Simultaneously, hedge fund increased short positions by 4.8K contracts. Total open interest shows that those that are long futures and options outnumber open interest that is short by 23K contracts, 71K to 48K.

Technicals

The technicals on the bean oil contract show that prices are attempting to form a bottom, with support near the 10-day moving average at 33.22. Prices could rumble up to resistance which is seen near the September highs at 36 cents per pound. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD index (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the index).

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For any questions or comments in regards to Bean Oil Rallies as Bullish Sentiment Follows WASDE Report, please contact David Becker at Google+, or LinkedIn

 

NOPA Crush falls below estimates; oil demand remains strong

NOPA’s crush data for September came in lighter than expected, but was the highest total in ten years for the month of September. 136.419 million bushels of soybeans were crushed during the month, which was the first month of the new crush season.  September’s crush was down 4.22% from last month but 4.75% higher than the amount crushed last September.  Analysts expected the crush to come in at 138.071 million bushels according to an average of analyst estimates in a Reuters survey. Meal exports totaled 487,397 tons, up 14.17% month over month and 10.87% more than September of 2016.

Soybean oil stocks were lower than anticipated.  Analysts had been expecting stocks to fall to 1.332 billion pounds.  However, strong demand pulled stocks down to 1.302 billion, 8.12% lower than August and 5.38% less than September of 2016.

Cumulative bushels crushed by NOPA members during the 2016/17 season are 136.42 million. The USDA is expecting to grow the crush by 2.16% to a new record of1.940 billion bushels.  The 2016/17 crush totaled 1.899 billion bushels.  Through September, NOPA crush members have crushed 4.75% more soybeans than last season.   This exceeds the USDA projection.  However, we are only one month into the current crush season.

NOPA September Crush Data

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INDUSTRY-RELATED NEWS


Oct 17 (The Hill)  A vote for Bill Wehrum is a vote against the RFS – There is a reason that the Renewable Fuel Standard (RFS), our nation’s policy governing the production and sale of biofuels, has broad bipartisan support in Congress. This policy is helping us revive rural economies, reduce our greenhouse gases, and become less dependent on foreign oil. Despite these benefits, in the ten months that Donald Trump has been president, his administration has launched unprecedented attacks on the program – attacks that fly in the face of promises Trump made as a candidate to our nation’s farmers that he would champion the RFS program if elected. READ MORE

Oct 13 (The Washington Post)  The Energy 202: The EPA is targeting biofuels. Chuck Grassley isn’t happy –  As chairman of the Senate Judiciary Committee, one of the congressional committees investigating Russian interference in last year’s election, Charles E. Grassley is in a better position than most other Republicans in Congress to tighten the screws on the Trump administration.   READ MORE

Oct 09 (CNN) Pruitt announces withdrawal of Clean Power Plan – Environmental Protection Agency Administrator Scott Pruitt announced Monday his agency’s plans to withdraw the Clean Power Plan, the sweeping Obama-era rule regulating greenhouse gas emissions. While speaking in Kentucky at an event with Senate Majority Leader Mitch McConnell, Pruitt said he will sign the proposed rule repealing Obama’s plan Tuesday. “When you think about what that rule meant, it was about picking winners and losers. Regulatory power should not be used by any regulatory body to pick winners and losers,” he said at the event. READ MORE

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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.

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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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