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By Staff | Sep 29, 2017

Cargill plans to open biodiesel plant in Kansas

Cargill has announced plans to build a state-of-the-art $90 million biodiesel plant in Wichita, Kansas.

Set to open January 2019, it will produce 60 million gallons of biodiesel annually. Opening the facility in Wichita will strengthen Cargill’s biodiesel operations in the heart of the Midwest where it already has biodiesel plants in Iowa Falls, Iowa, and Kansas City, Missouri.

Unlike other traders of biodiesel, Cargill is an integrated producer managing the entire supply chain from origination to production to delivery.

Corn analysis

Corn closed the week $.01 1/4 lower. Last week, private exporters did not report any private sales.

Weekly export sales of corn showed a total of 20.7 mb (526,900 mt) with all for the 2017-2018 marketing year. This put total marketing year sales at 434.2 mb, 35 percent less than the previous marketing year.

In the weekly crop progress report, NASS reported 86 percent of the corn crop is dented, just behind the average pace of 90 percent; 34 percent of the crop is considered mature versus 47 percent mature on average.

US corn harvest advanced to 7 percent complete, just below estimates of 8-10 percent and the average pace of 11 percent. Corn conditions are 63 percent good/excellent versus 74 percent last year.

Informa estimated 2018 corn planted acreage at 91.88 million, up 1.2 million from 2017. In the EIA report; US ethanol production fell for the second week in a row, seeing another 14,000 barrel slowdown.

Production for the week ended September 15, came in at 1.033 million barrels. Ethanol stocks are at 21.138 million barrels which is 5.6 percent higher than the stocks one year ago. Corn is likely to struggle through the winter months due to the large supplies available to the market. Producers should look to store the crop if on farm storage is available and sell the carry and when basis levels tighten. Do not store if only commercial storage is available.

Strategy and outlook

Producers should only make sales that address cash flow need during harvest and store balance of production.

Soybeans analysis

Soybeans closed the week $.16 3/4 higher. Last week, private exporters reported sales of 525,000 mts of soybeans to China, 190,000 mts of soybeans to Mexico and 1,080,000 mts of soybeans to an unknown destination.

Weekly export sales of soybeans showed a total of 85.9 mb (2,338,100 mt), with all for the 2017-2018 marketing year. This put total marketing year sales at 710.3 mb, 21 percent less than the previous marketing year.

In the weekly crop conditions report, for sobyeans; NASS reported 41 percent of the crop is dropping leaves versus 43 percent on average.

Only 4 percent of the crop has been harvested versus 5 percent average. Soybeans are now rated 59 percent good/excellent versus 73 percent good/excellent last year.

Informa forecast 2018 acres to fall 1.2 million to 89.06 million.

Soybeans are rallying on the strength of very strong export demand for soybeans. It is common for demand to improve this time of year as foreign buyers rush to secure newly harvested soybeans. This strong demand and likelihood that yields will come in below what USDA is currently forecasting places pressure on the bears.

Strategy and outlook

Producers should have made sales that address cash flow need during harvest and established downside protection on the balance.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

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