<\/p>\n<\/a>Grains<\/u> –
\nWhile soyoil\/biodiesel has been the largest beneficiary of news related to RFS mandates, corn\/ethanol trade is starting to get my attention here lately.\u00a0 While it has gone largely unnoticed by many, ethanol prices are absolutely en fuego lately.\u00a0 The chart attached here shows US spot cash prices at key spots, and if you were to pull up a chart of futures you would see prices breaking out of their trading range in place since late 2014.<\/p>\n
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Not only is flat price rallying sharply, but the inverse in the market has gone nuts as well.\u00a0 We\u2019ve spoken a few times in recent weeks about the data failing to show the market build stocks as it seasonally does in the fall and\/or winter months.\u00a0 Obviously the market\u2019s price structure is giving a major<\/em> signal that we should not be building stocks and on top of that we have a nearby shortage of ethanol.\u00a0 What makes this all the more impressive is that ethanol production so far this fall has been running at record levels for this time of year.<\/p>\n Export demand certainly appears to be the \u201cissue\u201d here.\u00a0 Unfortunately our data on exports is not as current as imports, with EIA only updating exports well after the fact.\u00a0 The most recent data we have from EIA is currently only through September, but that Sept data shows the highest level of net exports since late 2011.\u00a0 Data from private sources, such as FO Licht, shows that exports have remained strong since that time and should continue to post new highs.<\/p>\n As you\u2019d probably expect the primary destination for US ethanol exports is Canada.\u00a0 Brazil has increasingly been importing US ethanol as well due to higher biofuel mandates and higher sugar prices.\u00a0 China and other southeast Asian countries have also picked up imports as air pollution is starting to get a bit more attention in those areas.\u00a0 The point here is that this export demand could be here to stay.\u00a0 One thing to watch will be the spread between US and Brazilian prices as sugar prices have started to roll over in recent weeks.<\/p>\n Ethanol production margins remain very stout and the inverse is telling the market it needs more right now.\u00a0 With that in mind, look for production rates to remain strong in the weeks ahead.\u00a0 I was slightly<\/em> surprised to see WASDE leave their corn-ethanol grind unchanged last week.\u00a0 If production rates remain similar over the coming weeks I would expect them to make a move in their January update.<\/p>\n DISCLAIMER<\/u><\/strong>:<\/strong> Grains – While soyoil\/biodiesel has been the largest beneficiary of news related to RFS mandates, corn\/ethanol trade is starting to get my attention here lately.\u00a0 While it has gone largely unnoticed by many, ethanol prices are absolutely en fuego lately.\u00a0 The chart attached here shows US spot cash prices at key spots, and if you […]<\/p>\n","protected":false},"author":4,"featured_media":1563,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[],"yoast_head":"\n
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\nThe information contained herein has been taken from trade and statistical services and other sources we believe are reliable. Opinions expressed reflect judgments at this date and are subject to change without notice. These materials represent the opinions and viewpoints of the author\u00a0 and do not necessarily reflect the opinions or trading strategies of Nesvick Trading Group LLC and its subsidiaries. Nesvick Trading Group, LLC does not guarantee that such information is accurate or complete and it should not be relied upon as such. Officers, employees, and affiliates of Nesvick Trading Group, LLC may or may not, from time to time, have long or short positions in, and buy or sell, the securities and derivatives (for their own account or others), if any, referred to in this commentary. There is risk of loss in trading futures and options and it is not suitable for all investors. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RETURNS. Nesvick Trading Group LLC is not responsible for any redistribution of this material by third parties or any trading decision taken by persons not intended to view this material.<\/p>\n","protected":false},"excerpt":{"rendered":"