Bullish thoughts video for USDA report tomorrow

[dalek]

FYI FarmTech Energy finally got approval
yesterday on a new ethanol plant in Oshawa,
Ontario, to start construction immediately and be
using over 20 million bushels/year of corn within
18 months. They sound confident

[charliep]

Will note the bio diesel portion of bio fuel policy has corrected to market realities a lot more quickly starting with Europe. The US and Canada has bio diesel inclusion mandates but have been a lot looser/less impact on the market.

Canola meal is important but canola oil is the profitable part of crush (domestic and international). Canola is a healthy oil/captures premiums in many markets but there is still that get sold in the more generic market in direct competition with soybean oil and palm oil (export markets).

[LWeber]

***SENATE FINANCE COMMITTEE PASSES TAX EXTENDERS BILL
By a 19-5 vote on Thursday, the Senate Finance Committee passed the tax extenders bill that includes several biofuel-related tax provisions.
Among other provisions, the bill, the Family and Business Tax Cut Certainty Act of 2012, would:
--extend by two years, to Dec. 31, 2013, the $1/gal biodiesel and renewable diesel tax credit. The provision expired at the end of 2011. The language is a retroactive tax credit, extending the provision from the end of 2011 through the end of 2013

[charliep]

For those that like numbers, here is Canadian Oilseed Processors Association most recent board crush margin chart. Did the calculation and even with today's high soybean prices, 70 % of the value of canola comes from the vegetable oil side and 30 % meal.

[URL="http://www.copaonline.net/documents/COPAWEEKLYAUGUST82012.pdf"]COPA August 8[/URL]

[cottonpicken]

The grain and oilseeds market cap has
grown by 10s of billions of dollars the
month of July the funds have dump in way
more than 110 million.

Charlie,you can reference universities
studies all day long and I will destroy
them all day long.

The mandate was put in place for the
purpose of the creditors being able to
sleep at night.now that they are up and
running fully capitalized with a sound
debt structure they don't need to turn
the lights off with an income dream even
though some pencil head university geek
ks saying they are going broke because
their return on capital cost isn't
there.

If farmers in saskatchewan pencils in
return on capital we all would have quit
in the 90s.anyone remember getting crop
insurance what ifs showing a negative
return on all crop options?

That study actually makes me think the
break even is higher than the 9 dollar
level.

[cottonpicken]

On a side note in afew years time I
don't believe any of those plants will
be producing ethanol but they will still
be up and running.

[LWeber]

The grain and oilseeds market cap has
grown by 10s of billions of dollars the month of July the funds have dump in way more than 110 million.


http://www.cmegroup.com/wrappedpages/web_monthly_report/Web_OI_Report_CMEG.pdf

You can compare open interest at the end of June and beginning of July in the link above for the CME...

Lipper values are de-leveraged.

[ALLFARMER]

Best hay area I see is in Doc Weders area. Richie
bros sold bales in Grande Prairie area for I heard
15$ ea. I just bought 170 for 60$ delivered. From
Fairview north then east (around the scales)
major hay crop everywhere. This is an area I sold
bales to 2 yrs ago. No hay at home to put up so
making $550/day low bedding cheers

[kato]

There's no shortage of feed here, but there is a shortage of cattle. I can see the auction marts getting worried. We've gotten a few rains that came just in time, and they've kept things going.

We also have a dry dugout, but were either smart enough, or had the dumb luck to not buy feeders this summer. It would have been scarey enough buying feed for them without having to buy water too.

[newguy]

After watching the video of the US report you would have thought markets on Friday would have jumped more. Why not?

[charliep]

What was new in the report that hadn't been
anticipated by the market? Lots of other production
surveys by the private sector prior to the USDA which
highlighted similar estimates. The process now is the
one of cutting consumption to match the availability
of crop. That process is going to take some time.

Your challenge is to have a process that follows the
market and picks critical selling points/prices with
the discipline to act. Will be curious how this all
unfolds. A high price is only a high price when sell
and deposit the money.

[charliep]

cottonpicken

Just curious on your source of information on ethanol
plant profitability. I note what I posted was a
theoretical ethanol margin based on futures and
some assumptions. I nothing to do with the
profitability of the industry or an individual plant.
Simply an index of relative profitability.

What I am hearing is that individual older and less
efficient plans are getting shutdown. I suspect newer
plants with some of debt or poorly managed plants
starting or plant managers who haven't managed
their price risk are also under risk.

I would spend some time looking at the consumption
side of the USDA report and how they see the
rationing process occurring. This is the question at
this point. Larry highlighted the carryover stocks but
they are a derived number based on how USDA sees
consumption unfolding.

[charliep]

For what it is worth, USDA knocked 10 % out of US
ethanol use (4.5 bln bu versus 4.9 in June and 5 bln
bu over the previous couple of years. Make the
balance sheet, higher ethanol use would mean less
feed consumption, exports or more imports.
Carryover forecasts are at rock bottom. All above is
2012/13 S&D information.

[wd9]

Hey Larry, do you pay extra for posts in
bold?

[wd9]

http://www.youtube.com/watch?v=wJii_QNfJ_U

Not a drought everywhere.