Markets are called mixed this morning behind a choppy mixed
overnight session.
When the overnight session ended corn was up 2-3 cents, KC
wheat was down 2 cents, MPLS wheat was down 3-4 cents, CBOT wheat was down 2-3,
and soybeans were up 1 to up 9. At 8:20
outside markets have the US dollar off 100 points or so at 81.495 on the cash
index, crude is off 40 cents, gold is down a buck, and it looks like the DOW
will start off 60 points.
Sounds like the EPA opened the door for lower 2014 ethanol
mandate.
Below is from DJ NEWS
DJ DJ
UPDATE: U.S. EPA to Signal Changes Ahead for Ethanol Mandate
(Updates with formal announcement, reactions)
By Ryan Tracy
WASHINGTON--The Environmental Protection
Agency said Tuesday it will propose
cutting
next year's federal mandate for using alternative motor fuel, a reversal
that
comes as Congress heightens scrutiny of the program.
The agency said it would seek to reduce the
amount of "renewable" fuel that
the oil
industry must blend into the U.S. gasoline supply, a move that could
shrink
the market for ethanol and other products.
A 2007 law calls for the U.S. to consume
ever-rising amounts of renewable
fuel,
mainly corn ethanol made in the U.S. But the agency acknowledged Tuesday
that
the U.S. is approaching a "blend wall" -- the point at which the
market
can't
absorb any more ethanol without using new types of fuels that aren't
widely
sold.
"It's a significant development for the
EPA to overtly state that it intends
to be
flexible," said Jason Bordoff, director of Columbia University's center on
global
energy policy. Mr. Bordoff has called for the agency to reduce the
renewable-fuel
requirement, saying that not doing so could cause an increase in
gasoline
prices.
The EPA announcement came as part of the
rollout of the final requirement for
2013,
which will remain unchanged at 16.55 billion gallons of ethanol and other
fuels,
up more than 1 billion gallons from the previous year.
The lion's share of that mandate -- about 13.8
billion gallons -- is expected
to be
met with ethanol from Midwestern corn, with ethanol made from Brazilian
sugarcane,
diesel-motor fuel made from soybeans and other fuels making up the
rest.
The 2013 mandate puts government-required
ethanol consumption at close to 10%
of the
U.S. gasoline supply. Most gasoline today contains no more than 10%
ethanol.
Next year, the mandate is set to rise again,
but U.S. gasoline consumption is
expected
to be flat as Americans continue to drive more fuel-efficient cars.
"EPA
does not currently foresee a scenario in which the market could consume
enough
ethanol" to meet the 2014 requirements outlined in the law, the EPA said
in a
fact sheet released Tuesday.
"The administration now acknowledges the
blend wall as real and unavoidable,"
said
Stephen Brown, vice president for federal government affairs at Tesoro
Corp.
(TSO). "A clear signal is also being sent to Congress that additional
authority
to address the blend wall may be needed via legislation."
Reps. Fred Upton and Henry Waxman, the top
Republican and Democrat,
respectively,
on the House Energy and Commerce Committee, have said they are
discussing
possible changes to the renewable-fuel law.
The ethanol industry has said major changes
aren't necessary because refiners
can
switch to higher ethanol blends, which so far are not being sold widely even
though
the EPA says they are safe for new vehicles.
Having the EPA tweak the requirements to
provide flexibility "is exactly how
the
program was designed to work," said Brooke Coleman, executive director of
the
Advanced Ethanol Council, which represents developers of alternative fuels.
"There
are no problems with the program on the horizon that can't be fixed
administratively."
Write to Ryan Tracy at ryan.tracy@wsj.com
Subscribe
to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
08-06-13 1353ET
Copyright (c) 2013 Dow Jones & Company,
Inc.
Chain
Link: [CS20130806002209]
[Related
Stories]
I did see an increase in the Australia wheat on once estimate. Also seen that Iraq bought Australian and
Canadian wheat while Egypt bought Romanian and Ukraine wheat.
USDA did report sale of 220k tones of soybeans to China for
the 13/14 marketing year.
We will have weekly ethanol numbers out today.
Big news will be on Monday with the USDA report. Market is looking for bigger corn yields and
smaller soybean yields; but carryout numbers are expected to be high as the
market is still looking for carryout numbers to be over two times what they
presently are for both corn and soybeans.
One good news or possibility of good news is that everyone
is jumping on the bear bandwagon. A year
ago before this report everyone was and had been jumping on the bull
bandwagon. The August report came out
and corn made its highs and basically traded lower ever since. Yes it had a couple bounces but the trend for
a year has been down.
What made the high last year with the report? Everyone was bullish, everyone thought it was
going higher, we had been going up since June, the crop had continued to get
smaller, and we had the fund plenty long.
What do we have right now?
Nearly everyone is bearish, most everyone things it is still going
lower, we have been going down since June 20th or so, the crop has
got bigger or at the very least not got much smaller, and we have the funds
plenty short (record depending on how you look at it).
Don’t get me wrong I am not saying the low’s have to be in
and this thing has to turn around; because we all know the funds could just
continue to lay into this market. What I
am saying is that a lot of this bearishness that we presently have is getting
built into the market. I think the USDA
report has a chance to be a sell the rumor, but the fact event. A 14 billion bushel crop with 2 billion
carryout is old news. So if that’s what
the USDA reports on Monday do the funds need to keep selling this thing down
for that reason??????
Don’t forget this afternoon we will have our weekly
marketing meeting in Onida at 3:00.
Please give us a call if there is anything we can do for
you.
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