3 Big Things Today, January 21, 2021
1. Soybean and Grain Futures Rise in Overnight Trading
Soybean futures rebounded in the overnight session from yesterday’s losses on expectations for improved global demand.
S&P Global Platts Analytics said in a report early this morning that it sees China’s soybean imports in the 2021-2022 marketing year reaching a record and topping 110 million metric tons on a stronger-than-expected recovery in the hog and sow herd from African swine fever.
The U.S. Department of Agriculture last week pegged Chinese soybean imports at 100 million metric tons.
China lost about half of its swine population to the disease, which proliferated in August 2018, S&P Global Platts said.
“China’s swine herd recovery was seen at 90% of the pre-ASF level as of Nov. 30,” the firm said, citing data from the Ministry of Agriculture, or MARA. “If the current swine growth trend continues, backed by a steady process of pork industry consolidation and biosecurity measures, China’s hog production capacity is likely to reach 100% of pre-ASF level in June 2021,” MARA added.
Prices plunged yesterday on profit-taking and on speculation that rainfall in South America will give crops a much-needed drink of water.
Still, the recent rainfall in parts of Argentina and Brazil likely won’t be enough to cover moisture deficits, according to Weathertrends360.
Soybean futures rose 9¾¢ to $13.79¼ a bushel overnight on the Chicago Board of Trade. Soymeal was up $1.70 to $444.10 a short ton, and soy oil added 0.28¢ to 42.82¢ a pound.
Corn for March delivery gained 7¢ to $5.29 a bushel.
Wheat futures for March delivery rose 3¾¢ to $6.71½ a bushel, while Kansas City futures gained 6½¢ to $6.43½ a bushel.
2. RFA Files Petition, Motion to Halt Last-Second EPA Refinery Exemptions
The Renewable Fuels Association said yesterday it filed a petition for review and an emergency motion to halt exemptions granted to refineries Tuesday with less than 24 hours left in the Trump administration, which allows the refiners to forego renewable fuels standard requirements.
“The waivers issued by EPA Tuesday evening are completely without legal merit, and we took action immediately to prevent the agency from doing further economic damage to an industry already reeling from the impacts of (COVID-19),” the RFA said.
The Renewable Fuel Standard requires refiners to blend ethanol and other biofuels into their fuels or buy credits from companies that do.
In a statement on its website, the association said it filed a motion with the U.S. Court of Appeals for the D.C. Circuit hours after it found out about the waivers.
Data from the Environmental Protection Agency show the two exemptions given to refiners in 2019 reduced ethanol blending into gasoline by 150 million gallons while one exemption in 2018 eliminated 110 gallons of ethanol from use.
The 260-million-gallon reduction in ethanol use due to the waivers would be the equivalent of shutting three or four ethanol plants a year, the RFA said in its statement.
“EPA’s decision will inflict substantial, immediate, and irreversible harm” on U.S. ethanol producers, the association said in its court filing. “This would be devastating to America’s ethanol producers, many of which are already on the brink of closure due to the ongoing impact of the COVID-19 pandemic.”
National Corn Growers Association President John Linder said in a statement Tuesday he wasn’t shocked that the EPA made its last-second move.
“It shouldn’t be a surprise to those who have been paying attention for the last four years that this EPA would undermine corn farmers and the ethanol market on its way out the door,” he said. “There is no reason for the EPA to take this action now, especially with the Supreme Court set to consider the Tenth Circuit ruling in the new term. Corn farmers need an EPA that will follow the law as written and intended by Congress.”
About 30 waiver requests from 2019 and 2020 that are still outstanding will be handled by the Biden administration.
3. Light Snow Expected in South Dakota and Wyoming Thursday
Light snow is forecast for parts of western South Dakota and northeastern Wyoming tonight into early tomorrow, according to the National Weather Service.
Up to 2 inches of snow are possible in the region, the NWS said in a report early this morning.
More snow is expected with another “few inches” expected in southwestern and central South Dakota, the agency said.
Farther east in parts of northeast Iowa into central Wisconsin, scattered snow showers are in the forecast for today.
The precipitation is expected to continue through the weekend in the area.
“Several inches of snow are expected Saturday night into Sunday,” the NWS said.