Good morning. Grain prices are lower to start Wednesday with the USDA report out tomorrow. The report is not expected to offer any great revelations, but it is still a crop report that hangs in front of any increased trading interest. Estimates for ending stocks are below and you can see that just minimal changes are expected. Very little change is expected in South American numbers as well. Conab will have updated Brazil production numbers out early tomorrow morning. The EPA released their proposed guidelines for biofuel mandates for 2020, 2021, and 2022. They put the 2020 ethanol mandate at 12.5 Bln. gallons and the 2021 at 13.3 Bln. gallons. Those targets were originally set at 15 Bln. gallons a few years ago but Covid forced a pullback. This matters very little other than perception as ethanol production is already mostly in the books for those two years. It would apply for RIN trading to those out of compliance. The EPA proposed a return to the 15 Bln. gallon number in 2022. They proposed advanced biofuels as 4.63 Bln. for 2020, 5.2 Bln. for 2021, and 5.77 Bln. for 2022. Those numbers include the bean oil sector, and the bean oil market was disappointed in the estimate rumors yesterday and are more disappointed in the actual numbers overnight. January bean oil is trading 350 points off of yesterday’s high. These EPA proposals are open for comment until February. It was also rumored yesterday that the EPA would be recommending the denial of over 60 small refinery exemptions for 2020, but some compromise may still be becoming in that regard. Ethanol figures will be out today. The trade still watching a drier trend potential in parts of southern Brazil and Argentina. It is slated to be above normal temps through most of the U.S. over the next couple of weeks. Trade also watching signs of any additional export demand, especially China. Day 2 of the January fund roll is today. December futures go off the board on the 14th. Resistance still looms large in March corn from $5.90 t $5.95. Congress appears to have a deal in place to avert the debt ceiling deadline for next week. Have a safe day.
Stanford Grain Company
