Today’s Prices

Grain markets finished mixed today, no real direction up a day or two and down a day or two seems to be the trend over the last few days.

Grain Market News

Weekly Ethanol Production

Production was down from last week at 1.061 million barrels per day.

That’s still above the level needed to reach ethe USDA forecast.

Weekly Stocks of Fuel Ethanol

Stocks of fuel ethanol are rising sharply to 24.4 million barrels today.

That leaves ethanol stocks 16.9% above the level we were at last year.

Last year we had tight stocks, high ethanol prices, and ethanol margins were phenomenal.

Unleaded Gasoline

Prices down to $2.02 per gallon on Monday, that’s less than half of the price we were at in June.

Gasoline prices falling sharply has made ethanol less competitive and that has been a challenge for ethanol manufacturers.

The good news is we have seen a bounce in gasoline prices as well as crude oil over the past few days.

We’ve rallied from $2.02 to $2.24 for a high today.

Ethanol Swaps

Swaps are traded in Chicago and swaps is where most of the ethanol is traded.

Back in October gasoline rallied up to 3.02 per gallon before falling through November and December.

On our ethanol swaps it shows that the October/November rally took ethanol prices to $2.80 before falling to $2.12 this week.

The bounce in gasoline the last couple days has allowed ethanol to bounce a little bit as well.

But ethanol prices at 2.19 per gallon and gasoline at 2.24 means that ethanol is not extremely cheap.

Ethanol Profit Margins-Iowa

When gasoline prices rallied, and ethanol prices rallied to $2.80 that allowed profit margins to rise for ethanol plants.

The big drop in ethanol prices to 2.12 per gallon has retuned ethanol margins into negative territory.

Compare that to last year between Thanksgiving and Christmas when ethanol plants were making anywhere from $2-3 per bushel for every bushel that was processed into ethanol

Grain Market News

South American Precipitation Forecast

Our 2-week forecast shows dry weather for Argentina, Uruguay, Paraguay, and extreme southern Brazil.

Week 2 on the right side shows maybe some improvement in the rain in southwestern Argentina continuing to be dry in the adjacent areas of southern Brazil.

You can see from these maps that there’s a mixed influence on our grain markets.

7-Day Observed Precipitation

We mentioned improved rain in the U.S. over the last 7 days with most of it over the last 2 days.

We can see good rains in the central and northern Mississippi Valley, anywhere from .5-1 inch and some with 1.5 inches.

Then from the central and southern portions of the Mississippi valley we are seeing 2-3 even 4-5 inches of rain.

In addition to benefiting river levels, the precipitation is also seen as beneficial for the areas of the northern plains and northwestern belt where areas saw 1-2 inches of total precipitation.

3-Day Snowfall Forecast

In addition to the precipitation that has already fallen we do have additional snow.

3-6 inches of snow across southern Minnesota, 6 inches or more across Minnesota and the Dakotas.

That will certainly create some travel issues, but the moisture will be welcomed in most areas.

December Corn Chart

Corn prices rallied up and tested overhead resistance yesterday, fell back and saw some additional corrective action to the downside today.

The failure of corn to break through the overhead resistance is a little bit negative but we will note that the overall trend still looks to be upward off the lows posted last week.

The bottom line is the chart is giving us some mixed signals and the technical has turned sideways in a neutral area.

The longer-term trend is still pointed downward until if and when we would break through overhead resistance.

November Soybean Chart

Soybeans are in an uptrend off the lows posted back in early October.

Friday, they rallied up towards the $15 mark and since then we have chopped back and forth.

Technical indicators have also been chopping back and forth and not really pointed in any specific direction.

December KC Wheat Chart

Wheat prices look very good on the chart yesterday turning upward but yesterday close was disappointing and then we fell today.

Just today the market looks a bit negative but from last weeks lows it looks somewhat positive.

We are getting mixed signals on the chart with the overall trend pointed downward.

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