Highlights, Crude Oil Refinery, Export Sales, Markets & Rain Days Update 6/10/22
- Wright Team
- Jun 10, 2022
- 3 min read
Highlights
The USDA June S&D will be released at 11 AM Central time today. Do not expect many changes on the domestic S&D; we can certainly expect more soybean exports and probably more corn exports.
Yesterday morning, USDA announced the sale to unknown buyer of:
500 mts of old crop soybeans
142,500 mts of new crop soybeans
July soybean futures China’s Dalian Exchange made a new all-time yesterday at the equivalent of US$22.84 a bushel.
The rumor is Brazil’s government is considering increasing the blend of biodiesel 1% July and another 1% in August until 15% in December 2022.
And just like that, China put several areas of Shanghai back on partial COVID lockdown. So the crude oil rally may be over for a while.
US crude oil refinery capacity is 900,000 barrels a day less now than it was in 2019. Shell Oil announced yesterday they will shut down another refinery at the end of 2023. Lyondell Basell Industries announced in April it will permanently close its Houston crude oil refinery by the end of 2023. The refinery produces 89,000 barrels of gasoline, 92,600 barrels of diesel and 44,000 barrels of jet fuel every day.
Chevron’s CEO said last year that there will never be another refinery built in the USA again because of the ever increasing EPA regulations.
Acer Energy Ltd offered $1.75 billion for the 211,146 barrel-per-day (bpd) Convent, Louisiana, refinery before Shell permanently idled it in December. Shell said $1.75 billion was not a fair price for the facility, so they shut it down. Does that sound like a logical business decision? Sounds like Shell wants to reduce refinery capacity to increase the refining margin. Sounds like the same business model the cattle packers are running, less kill capacity, back-up slaughter ready cattle, cattle prices go down, but beef wholesale prices go to the moon.
However, Acer Energy continues to attempt to make a deal to buy the Convent refinery. If Acer cannot buy the closed Convent refinery near Baton Rouge, it plans to build a 300,000 barrel-per-day refinery along the Mississippi River near Convent. If so, it will be first crude oil refinery built in the US since the 1970, just before the EPA began operations.
From Kansas yesterday afternoon: Just had a feedlot call me asking for corn. Elevator gave him a quote for $2.25 over.
Corn basis has firmed this week at the river terminals, the processors and for the feeders. The 6 to 10 day and the 8 to 14 day weather forecasts are above normal temperatures with below normal rainfall. Do not be in a hurry to sell any more old or new corn or buy puts, but keep your powder dry. Likewise for soybeans.
The fixed interest rate for 30 day mortgage is 5.4%.
Export Sales Tracker
Market Data
This morning:
Crude oil is at $121.16, down $0.35
The dollar index is at 103.18, down 0.04
July palm oil is at 6,482 MYR, up 30. The contract high was made April, 29th at 7,229 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.
December cotton is at $124.50, down $0.43 per cwt. The contract high was made May, 17th at $133.79 per cwt. Cotton competes with soybeans and corn for acres.
July natural gas is at $8.995, up 0.032. The contract high was made June, 8th at $9.664. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $4.4269 per gallon, up 0.0232. The contract high was made yesterday at $4.4667. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
The Western Corn Belt has 2 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 1 less rain daysthan yesterday.
The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/
Explanation of Rain Days
Every day, every place in the world has a ten day weather forecast issued many weather services.
By a "place", we mean a Findlay, Ohio; Arcadia, Minnesota; Atlantic, Iowa; Fullerton, Nebraska; Cordoba, Argentina; Craig, Colorado, Saratov, Russia and ten million localities we have never heard of.
The ten day forecast predicts the high and low temperature for each day as well as whether or not rain is predicted for each of the ten days, likewise cloudy, partly cloudy, sunny, etc.
We look at the ten-day forecast and if we see rain is predicted for 4 of the next 10 days, we record a "4" for that location on the chart for the today. It does not matter whether it is one-hundredth of an inch or 5 inches. We realize about half the days expected to receive rain never get rain that day, but we must be consistent in what we report each day and every day because rain makes grain a few key weeks of the growing season. Of course, we scan the temperatures and the amounts of rain just to see if anything is getting way out of the norm.
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