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Central IL | Can someone please explain this to me in case i'm interpreting incorrectly. It was said that our government was going to reject all the SREs. however then it appears in return to "big oil" they will offset the loss with money.......that they then turn around and use to buy RINs......so it appears that nothing at all changed and in fact it will maybe hurt ethanol more than if they had never said they were going to reject SREs! please tell me i am missing something?
WAKE UP ETHANOL INDUSTRY and CORN FARMERS! Refineries with SREs Rejected to Get $300 mln to Buy 545k RINs Costing us 194 mln bushels of Corn Demand.
#Ag Secretary Sonny Perdue has a nice way of speaking that farm wives at the Commodity Classic in San Antonio told me that they liked. He is that down home southern good guy that enabled him to get elected Governor of Georgia. As Governor of Georgia he represented his constituent interests which included opposing the RFS. He represented the chicken integrators which hated the RFS for increasing the price of corn and therefore their feed costs. There is not much corn grown in Georgia so there was little direct benefit from the biofuel industry. One plant in Georgia struggled and folded. Corn-belt ethanol and the RFS was an obstacle to the guys financing his political campaign. So, Sonny Perdue came to USDA with a different perspective than previous Ag Secretaries and that bias has shown in USDA policy. Tom Vilsack was a huge promoter of biofuel throughout federal government interagency work as Ag Secretary. One could argue that Obama support for biofuel was lukewarm but we knew that we had a major advocate in Washington at USDA. They did not approve SRE requests that cost us 1.5 bln bushels of corn demand under Trump. The Department of Energy lines up with EPA on biofuels policy and then Energy Secretary Rick Perry, also southern… from Texas, carried the petroleum industry banner fighting the RFS. The EPA is run by petroleum industry shrills so one can see that the deck has been stacked against us in the Trump administration. We have gotten a lot of lip-service professing support but no real kisses. Year-around E-15 approval was meant to make up for a lot of damage done to the RFS. It falls far short. Even the recent partial rejection of pending SREs will be undermined if refinery RIN purchases are funded by taxpayers. Refineries will reportedly get $300 mln in a plan that the EPA is reportedly working on. $300 mln would buy 545 mln RINs so that refineries would not blend 545 mln gallons of ethanol killing demand for 194 mln bushel of corn. The ethanol industry and farmers are being played by this new scheme. There is no question that integrated livestock and petroleum interests are the real interests of Trump and his administration. When push comes to shove Sonny Perdue has been the fox in the RFS chicken coup.
That is not the worst of it though. I have had private sources connected commercially to Chinese buyers tell me that USDA has known for some time that Chinese demand would be significantly larger than stated. They had a chance to update their forecast in the September report and didn't. It is now becoming more transparent that China is in our market big time and will bring home much larger totals than USDA currently has fit into the balance sheet. Why? There are some who are very angry seeing it as blatant end-user bias that I have noted is helped by USDA process. If the USDA had told what they knew when they knew it, the market would have had this information for 2 months now. That let end-users including China steal a lot of low-price grain/soy. Some allege that this was so bad that it was "criminal". I paid little attention to the September crop report believing that until USDA harvests some of their plots they cannot accurately measure the impact of what happened to the end of the growing season. They should have this data for the October crop report. If they update the balance sheet for Chinese demand, that should shrink forecast carryovers significantly. We should get some transparency from them in the quarterly stocks report first. | |
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Ethanol update. Down 8% Year on Year.
