EPA RFS WAIVER REQUEST PUBLIC COMMENT PERIOD OPEN... The public comment period on requests for a waiver of Renewable Fuels Standard (RFS) ethanol mandates will run through Sept. 26, according to the Federal Register notice that was finally published Aug. 30. The request for public comment was to have initially been published in the Federal Register in the Aug. 27 edition but was “inadvertently omitted” from that day’s edition, according to the version published on Aug. 30. EPA requests information on the following along with “data or specific examples in support of their comments.”
Whether compliance with the RFS would severely harm the economy of Arkansas, North Carolina, other states, a region or the United States.
Whether the relief requested will remedy the harm.
To what extent, if any, a waiver would change demand for ethanol and affect prices of corn, other feedstocks, feed and food.
The amount of ethanol that is likely to be consumed in the U.S. during the relevant time period, based on its value to refiners for octane and other characteristics and other market conditions in the absence of the RFS volume requirements.
If a waiver were appropriate, the amount of required renewable fuel volume appropriate to waive, the date on which any waiver should commence and end, and to which compliance years it would apply.
NCGA WANTS RFS COMMENT PERIOD EXTENDED... In a letter to EPA Administrator Lisa Jackson, National Corn Growers Association (NCGA) president Garry Niemeyer said due to the demands of harvest, a 30-day comment period would not provide sufficient time for a thorough analysis of the proposed waiver of the RFS. He requested a 60-day comment window. “Also, with the crop still in the field, it is too early to determine this year’s final corn supply,” he wrote on behalf of corn growers.
UKRAINE’S AG MINISTRY, GRAIN TRADERS AGREE TO EXPORT LIMITS... The Ukrainian government and exporters have come to a voluntary agreement on 2012-13 grain exports. The ag ministry and grain traders’ unions have agreed to a maximum grain export volume o f 19.4 million metric tons (MMT) -- 12.4 MMT of corn, 4 MMT of wheat and 3 MMT of barley. The total is below the 21 MMT to 22 MMT forecast by Agriculture Minister Mykola Prysyazhnyuk earlier this week. According to official government data, since July the country has exported 1.3 MMT of wheat, 1.1 MMT of corn and 551,000 metric tons of barley. An agreement on export volume comes amid fears demand for Ukrainian supplies could spike due to concerns neighboring Russia may eventually announce export controls.
PF MIDWEEK MARKETING GAME PLAN UPDATE...
CORN: This year’s drought-ravaged crop limits the downside, but seasonal pressure is still possible -- if not likely. It’s recommended you get current with advised with 2011- and 2012-crop sales. Hedgers are 35% sold on expected 2012-crop production via cash forward contracts -- 25% for harvest delivery; 10% for March 2013 delivery -- with another 40% of expected production hedged with Dec. $6.50 put options purchased for 31 1/2 cents. Cash-only marketers are also 35% priced on expected new-crop production via forward contract -- 10% for harvest delivery; 10% for March 2013 delivery; and 15% for May 2013 delivery. Hedgers and cash-only marketers are 100% sold on 2011-crop in the cash market.
BEANS: Get current with advised old- and new-crop sales, but wait to make additional sales for now as fundamentals are bullish. Still, seasonal pressure is possible as supplies are tight and there have been no signs historic prices are slowing demand. Hedgers are 50% sold on expected 2012-crop production via cash forward contract for harvest delivery with another 25% of expected production hedged with Nov. $14.00 put options purchased for 42 3/8 cents. Cash-only marketers have 50% of expected 2012-crop forward sold for harvest delivery. Hedgers and cash-only marketers are 100% sold on 2011-crop in the cash market.
WHEAT: Wheat will very likely continue to turn to the corn market for price direction. Hedgers and cash-only marketers have 75% of 2012-crop sold in the cash market. Be prepared to increase cash sales if futures signal a technical top is in place. Hedgers may also add hedge coverage to protect downside price risk when the rally runs out of steam.
COTTON: Hedgers and cash-only marketers have 50% of expected 2012-crop production sold for harvest delivery. Be prepared to advance new-crop sales on a sharp price bounce as carryover is expected to rise sharply in 2012-13. Hedgers and cash-only marketers are 100% sold on 2011-crop in the cash market.
CATTLE: Fed cattle producers should carry all risk in the cash market for now. While there are some concerns demand will ease now that summer grilling season is done, tight supplies limit downside risk. And if futures break out above the top of the extended, choppy range, it would likely spark an extended price rally. Feeder cattle buyers should be prepared to add long hedge coverage as futures are signaling a low is in place.
HOGS: Concerns with hog supplies are keeping futures at a big discount to the cash market. We don’t want to add hedge coverage with futures trading in a hole, but be prepared to hedge an overdue corrective rebound.
FEED: We are not interested in locking in current, historically high prices for an extended period. But be prepared to aggressively extend coverage on a sharp price pullback as corn and meal supplies will be tight through the 2012-13 marketing year. Given the supply concerns, price corrections are likely to be short-lived.
