COMMENTARY 2/28/17

In SA, heavy storms struck Mato Grosso  and E Central Argentina yesterday and an additional 3.50” to 7” of accum is expected for N Brazil over the next two weeks with a focus on Mato Grosso.

St Louis river level RISING~ at 12.3′ and forecast 18.2by 3/10.  

CORN

UP 5

An impressive 17 cent range today was compliments of news and then rumors of fake news on biofuels policy. The RFA Chair Dineen said the Trump Administration had informed them that the point of obligation would change from the refiners to position holders at the terminal and that E-15 would be allowed all year long. Late morning, the Wall Street Journal reported that the White House denied that an executive order involving the program even existed. Either way, the denial by the White House may indicate they are not as ready to make the change as some thought. Some talk of local E-10 blends containing up to 22% ethanol (which means better blending margins since ethanol is cheaper than unleaded) and lower mpg and issues with engine wear.

 BEANS     

UP 14

Strong as the Biofuels group was rumored to be in discussions with the Trump Admin over a possible Executive Order to revamp the RFS.  They would aim to curb imports of biodiesel from Argentina by ensuring domestic producers qualified for the currently expired tax credit (currently up for renewal after expiring at the end of 2016). That would be an attempt to stop biodiesel imports by guaranteeing that only US domestic biodiesel producers can qualify for blender tax credits.  There is still lots of uncertainty of logistics im South America with the warmer weather and planting season is right around the corner. US/SA fundamentals still look to be headed for a very large bean crop coming for Arg and Brazil and a large shift in bean acres here too! are expected in the US.  Take advantage of this old/new crop volatility!

 

WHEAT

UP 5

Fund buying, but took a back seat to the corn/beans and biofuel news.