Reuters is reporting the EPA has
proposed a new 2014 renewable fuel
target of 15.21 billion gallons in
total, of which 2.21 billion must come
from "advanced" biofuel sources. This
would imply a reduction in the 2014
mandate for ethanol to 13.0 billion
gallons, down from a 13.8 billion
mandate in 2013 and a prescribed 14.4
billion mandate for 2014. According to
Reuters, the new EPA proposed renewable
fuel targets for 2014 would mandate the
use of 23 million gallons of cellulosic
ethanol and hold the biodiesel portion
of the mandate steady at 1.28 billion
gallons. These rumors of biofuel mandate
cuts helped fuel further losses in corn
futures to trade to new contract lows at
$4,324/bushel. 2013 October WASDE report
estimates for 2013 corn ending stocks
were estimated at 1,923 billion bushels
with this new law we could see 301
million less corn bushels in usage for
ethanol . The proposed EPA rule would go
on to a public comment period and could
become law later this year. If it
becomes law the USDA will need to adjust
2013 corn usage for ethanol from 4.9
billion bushels to 4.6 billion bushels
approximately which is bearish for corn
futures as 2013 ending stocks could jump
to 2.224 billion bushels not seen since
1987.
proposed a new 2014 renewable fuel
target of 15.21 billion gallons in
total, of which 2.21 billion must come
from "advanced" biofuel sources. This
would imply a reduction in the 2014
mandate for ethanol to 13.0 billion
gallons, down from a 13.8 billion
mandate in 2013 and a prescribed 14.4
billion mandate for 2014. According to
Reuters, the new EPA proposed renewable
fuel targets for 2014 would mandate the
use of 23 million gallons of cellulosic
ethanol and hold the biodiesel portion
of the mandate steady at 1.28 billion
gallons. These rumors of biofuel mandate
cuts helped fuel further losses in corn
futures to trade to new contract lows at
$4,324/bushel. 2013 October WASDE report
estimates for 2013 corn ending stocks
were estimated at 1,923 billion bushels
with this new law we could see 301
million less corn bushels in usage for
ethanol . The proposed EPA rule would go
on to a public comment period and could
become law later this year. If it
becomes law the USDA will need to adjust
2013 corn usage for ethanol from 4.9
billion bushels to 4.6 billion bushels
approximately which is bearish for corn
futures as 2013 ending stocks could jump
to 2.224 billion bushels not seen since
1987.