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-EPA rule proposal viewed as disappointing for ethanol
-Drier weather welcomed for accelerating U.S. harvest
-China buying Brazilian soybeans
-USDA reports corn sales to Mexico

 After all the hubbub of a potential increase in biofuel blending mandates to account for previous “lost small refinery waiver gallon†exemptions, the EPA’s actual proposed rule appears to leave a considerable amount of leeway/uncertainty in the likely/potential impact of the ultimate rule change. Previous ideas of the potential rule change, which was believed to include adding back a three-year average of previous waiver gallons to the 2020 blending mandate, accounting for an estimated 1.35 billion gallons, appear to be incorrect given the text of the EPA’s proposed rule. Specifically, the EPA is now proposing making blending mandate adjustments based on estimated future small refinery exemptions rather than known, past exemptions, which obviously completely changes the playing field as it becomes a subjective assessment instead, providing plenty of room for other motivations to become involved in the decision. The EPA’s “intention†to increasingly grant partial exemptions moving forward, vs the previous practice of nearly blanket full exemption grants, also would reduce the “estimated†waiver gallons to be granted in the thought process/calculation. The EPA’s statement on the supplemental proposed also specifically says. “Today’s notice does not change the proposed volumes for 2020 and 2021,†as they then go on to discuss how the annual mandates would be adjustment under the new plan. They will hold a public hearing on the proposed rule change on October 30, followed by a 30-day public comment period, upon which the final rule will be published at the end of November. The EPA’s statement can be found at https://www.epa.gov/newsreleases/epa-issues-supplemental-proposal-renewable-fuels-volumes.

 The USDA said they are considering adding a revision to the previous year’s corn crop as part of the September Grain Stocks report as they have always done for soybeans. Currently, any revisions to the previous year’s crop aren’t made until the January Annual Crop Production report.

ï‚· Ideas are China booked around 15 cargoes of Brazilian soybeans for Nov forward shipment in recent days.

ï‚· The USDA reported the sale of 229k tonnes of corn to Mexico this morning, with 137k for 19/20 and 91k for 20/21 delivery.

ï‚· Egypt tendered for an unspecified amount of wheat yesterday for Nov 21-30 shipment. The lowest fob offer was French wheat at $210.86/tonne. For comparison, US SRW at the Gulf for Nov shipment is currently priced around $223/tonne, with HRW around $221/tonne. The lowest Russian offer was $212.50/tonne fob, with Ukrainian offered at $210.90. Including freight, Russian was cheapest at $229.42 (Ukr $230.20, French $231.11)

ï‚· A fire at a petrochemical storage facility outside of San Francisco involved two ethanol storage tanks, resulting in the loss of an estimated 250k gallons (6.0k barrels), representing a literal drop in the bucket of nationwide stocks as of 10/04/19 of 891 million gallons (21.2 million barrels).

 U.S. corn harvest was 22% complete as of Sunday vs 15% the previous week, 36% average and 38% last year. Average “expectations†were 24%. As of Sunday, 92% of the ND crop, 95% SD and 98% MN was denting, which should limit the amount of damage realized from last week’s cold snap. With the next push of seriously cold temps expected near the end of the month, the vast majority of the U.S. crop should be near full maturity by then.

 U.S. soybean harvest was 26% complete as of Sunday vs 14% the previous week, 49% average, 37% last year and 25% “expected.†As of Sunday, ND was 96% dropping leaves, SD and MN 92%, NE 91% and IA 85%. There is no doubt harvest is going to be a very slow go across the northern states, but outright bushel loss from the recent cold/snow may not be severe.

 U.S. spring wheat harvest is 94% complete vs 100% last year and average. ND was reportedly 93% harvested as of Sunday leaving 23 million bushels unharvested based on the USDA’s latest production estimate. SD was reported 100% complete, with MN 98%. While some bushels may end of being lost due to unharvestable conditions, it appears numbers should be limited in the big picture.

ï‚· U.S. winter wheat planting continues uneventfully with 65% complete, right in line with average and 64% last year. Currently, none of the 18 major winter wheat producing states are reporting planting delays of any merit/concern.

Weather A mostly dry Midwest forecast through early next week should allow for accelerated harvest activity. Things look to be mainly dry for the rest of the week, with a weak front to bring generally less than .30†and coverage of around 60% by Saturday. Sunday looks to be dry in most of the region, with another front to arrive in the west early Monday an then work through the region for Monday and Tuesday. There are some minor differences in the models as to the exact amount of rain and the coverage, but a compromise between the two sees totals of around .30-1†to fall in MO as well as most areas east of the MS River. Totals in IA and MN look to be generally less than .50â€, although there is the chance that MN could see totals of .50-1†fall as well. Temps will run below average across the region through Friday and then warm to average to a bit above average for the weekend and most of next week. Rains of .50-1+ will fall across most of the eastern Argentine growing areas of Buenos Aries and Entre Rios as well as into the Brazilian states of RGDS, Santa Catarina, Parana and MGDS in the next 5 days. The rest of the Brazilian growing regions look to be fairly quiet in the next 5 days. The 6-10 day period sees rains of .50-1.5â€+ to fall in most of the Brazilian growing regions, with things mainly dry in Argentina.

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