-EPA 2021 RFS proposal little-changed from 2020
-Reduced 2020 biofuel blending mandates requested
-NOAA 30 and 90-day weather outlooks favorable
-USDA Cattle on Feed report tomorrow-trade estimates included
-Russian wheat crop estimate ticked lower
-Export Sales strong – except wheat
The EPA’s proposal for 2021 RFS biofuel blending mandates leaves conventional ethanol blending unchanged at 15.0 billion gallons, with a slight increase in advanced biofuels blending to 5.17 billion gallons from 5.09 billion gallons this year, as the cellulosic biofuel requirement would tick up to 670 million gallons from 590 million this year. The biodiesel blending mandate for 2021 has already been officially set at 2.43 billion gallons vs 2.100 billion for 2020, with the current proposed standards raising it to 2.76 bi lion gallons for 2022. On the other side of the equation, though, a group of 15 Senate Republicans, various state governors and oil industry companies have asked EPA Chief Andrew Wheeler to “significantly reduce” 2020 blending
requirements given the massive negative impacts on biofuels demand due to the coronavirus pandemic.
Tomorrow afternoon, USDA will release the monthly Cattle on Feed report. The average estimate of cattle on feed as of May 1 is 95.1% of last year (94.1-96.0 range of ideas) and compares to 94.5% as of April 1. April placements are estimated at 77.4% of last year (71.8-86.7 range), the 2nd consecutive month of significantly lower placements following March’s 77.3%. April marketings are estimated at 75.1% of last year (70.0-82.7 range) vs 113.1 in March as a result of the multiple processing plant closures due to coronavirus.
Day 2 results of this year’s virtual HRW crop tour put the average yield in the west-central portion of Kansas at 42.5 bushels/acre and 32.9 bu/acre for southwest Kansas. A simple average of the two would be 37.7 bushels/acre, but again may not be a fair assessment as it is not an acreage-weighted Day 2 average yield. Along the same lines, the validity of direct comparisons to past years’ true crop tours is questionable, as well, but last year’s Day 2 average yield assessment was 47.6 bushels/acre, while the most-recent 5-year average Day 2 tour-estimated yield was 42.7 bu/acre.
NOAA’s 30 and 90-day outlooks released today show average temperatures and above average precip expected for the corn belt in June, as well for as the entire June-August period (maps on page 2).
Russian ag consultant IKAR lowered their estimate of the country’s wheat crop to 76.2 MMT from 77.2 MMT previously and compares to the USDA’s 77.0 MMT estimate and last year’s 73.6 MMT USDA-estimated crop. USDA estimates of the Russian crop do not include the Crimean Peninsula, which typically is around 1 MMT, while estimates from those within Russia do. USDA still accounts for Crimean production in Ukraine.
Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/40179 details on the USDA Export Sales report.
U.S. corn sales were 884k tonnes (34.8 million bushels), in line with market expectations of 500k-1.0 MMT, but down from the previous week’s 42.4 million. However, this week’s sales were double last year’s same-week sales of 17.4 million bushels and were, again, notably above the roughly 11.0 million bushel/week average “needed” pace.
U.S. soybean sales were a 22-week high at 1.205 MMT (44.3 million bushels), coming in above market expectations of 500k-1.0 MMT, with 738k tonnes in new sales reported to China, as well as 264k tonnes to unknown.
New crop wheat sales were 252k tonnes (9.3 million bushels), in line with market expectations of 100-400k, while old crop sales of 176k tonnes (6.5 mil bu) were also within expectations of 100-250k tonnes, as well. Overall, wheat sales remain quite tepid though. New crop total commitments of 93 million bushels are well below last year’s 122 million and are the 2nd lowest of the last 10 years at this point.
U.S. soybean meal sales were 199k tonnes, in line with expectations of 75-250k tonnes, up from the previous week’s 101k and were an 8-week high. Soybean oil sales were very strong at 62k tonnes, the 2nd highest of the marketing year and easily outpacing market expectations of 15-45k tonnes.
Rains of .50-1” fell across the SE 1/3 of OH, with dry weather dominating the rest of the Midwest yesterday. The majority of the corn belt will again see dry weather occur today, with some lingering rains across south east OH. A front will bring showers and thunderstorms to areas west of the MS River for Friday and then into S WI and N IL Saturday, with totals of .25-.75” most common. Another front is indicated to roll through all of the region Sunday into Monday,
Tuesday and Wednesday. Estimates on amounts with it are running in the .60-1.2” range. Ideas then become mixed for the end of next week, with the GFS indicating mainly dry weather to occur and the European indicating rains of .75-1.5” to fall in most of MN, IA, MO, WI, MI and the NW ¾ of IL, with totals of .20-.60” elsewhere. Temps will run near average for the next 5 days and then a bit below across the western Midwest and a bit above in the eastern Midwest for next week