Glacier FarmMedia COVID-19 & the Farm

Experts

 

The Good, Bad & Ugly

The Good, Bad & Ugly

The Good: Corn ethanol production hit 1.096 million barrels per day last week which is the highest production since November 2017 when production topped 1.1 million barrels per day. USDA is currently projecting a 5.2 billion bushel ethanol use estimate for the 2021-22 crop year. Ethanol use is expected to increase significantly this year as gasoline prices hit multi-year highs. The markets seem to be focussed on the lower corn export numbers, rather than the increased domestic use. Corn domestic use is currently projected to increase by 214 million bushels from last year.  By the way, corn export commitments are higher than last year at this time, although USDA is projecting a lower export forecast.

 

The Bad: Canola prices went lower today with the November contract off C$11.90 per tonne to close at C$937.40 per tonne. The move in January canola was even larger with the contract dropping C$17.20 per tonne. The good news is that the losses today just retraced the gains from yesterday, so the upward trend remains intact. The main culprit today was a 3.28 per cent in the December soybean oil contract, which pressured both canola and soybean futures. Crude oil futures played a role in driving vegetable oil lower as nearby crude oil futures dropped US$1.08 per barrel. The market seemed to ignore the fact that WTI crude oil futures closed well above the US$80 per barrel mark.

The Ugly: Fertilizer prices are on the rise and the Russians are mulling a ban on fertilizer exports. Of course this is just a rumour, but in Putin’s Russia, where there is smoke, there is fire. The ban of Chinese exports of fertilizer have pushed prices higher and undoubtedly has resulted in additional business for Russia. Farmers in Russia are complaining about high prices and Putin seems to be sympathetic to their situation. It is the least that he can do as he taxed their exports earlier this year. This is not good news for global fertilizer prices.