Soybeans Slide as EPA Cuts Fuel-Blending Targets -- Daily Grain Highlights
By Kirk Maltais
--Soybeans for January delivery fell 0.9% to $12.50 1/4 a
bushel, on the Chicago Board of Trade Tuesday, with biofuel
blending mandates set to be released by the EPA retroactively
cutting blending targets.
--Wheat for March delivery rose 0.3% to $8.08 1/2 a bushel.
--Corn for March delivery rose 0.4% to $5.86 a bushel.
Bean Bust: The EPA's expected new mandates applied pressure to
soybean futures trading on the CBOT late in the day - as the EPA's
reported targets are seen as a cut to the amount of renewable fuel
needed by oil refineries going forward. "Beans traded both sides of
unchanged, ending lower on an apparent shift of RVO's from the
biodiesel category into ethanol, at least as far as market
expectations were concerned," said Charlie Sernatinger of ED&F
Man Capital. Soyoil futures finished down 1.3% today.
Not All Bad: While soybeans slipped on the EPA reports, corn
futures turned higher with the figures for 2022 being a supportive
surprise for traders. While the EPA will likely reduce targets for
renewable fuel blending, it also plans to reduce the amount of
small-refinery waivers it allows. "The 2022 mandate is supportive
with the EPA suggesting that it will reject a significant number of
small refinery waivers," said AgResource.
Face Off: Grain traders kept their eyes trained on news coming
out of talks between President Biden and Russian President Putin
today, which are the result of Russia gathering thousands of troops
at the Ukraine border. For wheat in particular, the implications of
the situation turning hot could be immediate - with Russia being a
leading source for wheat exports.
Applying the Brakes: With Christmas drawing closer, grain
traders are slowing down their activity and selling off ahead of
the holiday, said Dan Hueber of the Hueber Report. "It is not that
we have done anything outlandish, but I continue to believe there
is a good possibility that we could see prices work generally lower
into Christmas and the end of the year," said Mr. Hueber.
Shorter-term, traders appear to be getting their positions ready
ahead of Thursday's WASDE report from the USDA - but for the
remaining weeks of the year, a holiday ramp-down is on traders'
Rising Supplies: Inventories of ethanol in the U.S. could be in
for another jump in tomorrow's report from the EIA, according to
analysts surveyed by Dow Jones this week. Analysts forecast that
ethanol supplies are going to rise anywhere between 20.33 million
barrels to 20.9 million barrels - up from 20.3 million barrels
reported last week by the EIA. Meanwhile, daily production is also
expected to rise, to as high as 1.06 million barrels per day, which
is up from 1.04 million barrels per day reported last week.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--Hormel Foods Corp. will release its fourth-quarter earnings at
6:30 a.m. ET Thursday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--The USDA will release its monthly WASDE report at noon eastern
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
December 07, 2021 15:49 ET (20:49 GMT)
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