Evening Report (VIP) -- Advice -- March 27, 2013

March 27, 2013 09:45 AM
 

CORN AND SOYBEAN PRODUCERS: MAKE INITIAL 10% 2013-CROP SALES

December corn futures and November soybeans have rallied nearly 30 cents from the lows posted early this month. While prices aren't at levels at which we had hoped to start 2013-crop marketings, the recent price strength and the calendar say it's time to make initial new-crop sales. Plus, we want to get some sales on the books prior to USDA's reports on Thursday. As a result, hedgers and cash-only marketers were advised this morning to sell 10% of expected 2013-crop corn and soybean production via cash forward contract because new-crop basis is relatively strong for harvest delivery.

 

HOGS & PIGS REPORT EXPECTED TO REFLECT HERD EXPANSION... Traders expect tomorrow afternoon's Quarterly Hogs & Pigs Report to reflect expansion in the industry. If the pre-report average trade guess for All Hogs and Pigs of 100.7% of year-ago is accurate, it would result in total inventory of 65.35 million head -- around a 450,000-head increase from last year at this time. The only category that is expected to come in below year-ago levels (because Hogs 120-179 lbs. at 99.9% of year-ago is basically even with year-ago) is the March-May farrowing intentions category at 98.7% of year-ago. When you "add on" a pigs-per-litter rate that is expected to be 1.1% greater than year-ago to this farrowing intentions category, is still results in marketings near year-ago levels. Therefore, the report is expected to point to expansion in the year ahead.

Quarterly H&P Report Expectations

Avg. trade guess

Range

 

% of year-ago

All Hogs and Pigs

100.7

100.3-101.6

Kept for breeding

100.3

99.7-101.2

Kept for marketing

100.8

100.3-101.7

Dec-Feb pig crop

101.2

100.6-101.7

Dec-Feb pigs per litter

101.1

100.6-101.5

Dec-Feb farrowings

100.1

99.7-100.3

Mar-May farrowing int.

98.7

97.9-99.8

Jun-Aug farrowing int.

100.9

98.9-101.6

Hogs under 50 lbs.

100.9

100.4-101.5

Hogs 50 to 119 lbs.

100.7

100.1-102.7

Hogs 120-179

99.9

99.4-101.5

Hogs 180 and over

101.6

99.7-103.8

 

WEEKLY ETHANOL PRODUCTION SLIPS SLIGHTLY... According to the Energy Information Administration (EIA), ethanol production the week ended March 22 of 805,000 barrels per day (bpd) was down 4,000 bpd from the previous week and 1,000 bpd above the four-week average for an annualized rate of 12.3 billion gallons. Ethanol stocks of 17.4 million barrels is down 5.5% from the previous week -- the lowest since Dec. 9, 2011.

 

STUDY: RIN CREDITS NOT A FACTOR IN HIGHER GAS PRICES... Contrary to recent reports from the oil industry, the Renewable Fuel Standard (RFS) and its associated "RIN credits" have not been a factor in this spring's higher retail gasoline prices, according to new analysis conducted by Informa Economics Inc. In fact, the study found ethanol costs significantly less than gasoline at the wholesale level and is reducing pump prices for consumers across the country.

The analysis, commissioned by the Renewable Fuels Association (RFA), found RINs are likely contributing no more than $0.004 to the retail price of a gallon of gasoline. Meanwhile, ethanol's wholesale discount to gasoline in 2013 has reduced the pump price for blended gasoline by an average of $0.044 per gallon. Thus, when the net impact of both RIN costs and ethanol's discount to gasoline are considered, ethanol-blended gasoline is saving consumers an average of $0.04 per gallon based on straight blending economics. According to the authors, this savings doesn't take into account either the indirect benefit that ethanol has on gasoline prices by effectively lowering demand for crude oil and clear gasoline or the enhanced octane value of ethanol over gasoline.

High gasoline prices in early 2013 can be explained by several factors unrelated to the RFS, RINs or ethanol use, the report found. Get more details.

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close