Highlights
Wayne Bacon of Hammersmith Marketing LTD said the fine print of the EPA’s biofuel mandates for 2023 and 2024 issued Wednesday added rapeseed as an acceptable vegetable oil for biofuels and that was the reason bean oil lost 10% of its value. When the mandate targets were announced, we reported they were about as expected, but the bean oil price was falling out of bed. The only logical reason was too many spec longs were disappointed. Well, yes, they were disappointed all right, but not by the mandated level, but because bean oil will have to compete with rapeseed oil for market share of biofuel. How much rapeseed oil does the US grow and import? We never heard of either. Wayne’s comments yesterday about wheat & beans:
Wheat prices in the USA were lower on the bearishness of international prices this week. Not that there were any really good reasons for lower prices to be expected, just anything the slightest bit bearish (or bullish) in the Black Sea moves world wheat prices. There is no US fundamental reason this week for lower USA wheat prices.
Soybeans had a big drop early in the week following the announcement on rapeseed oil being approved for bio-fuel use – but the beans recovered by the end of the week, although soyoil did not. Soymeal prices were higher on very good demand and concerns over possible limited supply from Argentina in coming months.
Wayne said corn was lower on poor US export sales (yes, but old news for 4 months) and that was due to cheaper corn in Brazil and Ukraine (true but 3 month old news). Roger adds the failure of corn to move higher after the 12 cents gained a week ago Wednesday and Thursday led to technical traders to push for that gap made on August 23rd on the corn daily charts. CHS’ Nick Paumen said Friday afternoon, The corn market succumbed to technical selling as nothing changed from the fundamental aspect today.
Andrey Sizov, The Black Sea Area market guru, said Friday evening, Another sad day for wheat bulls, (but) in our view, fundamentally, it does look cheap and the risk/reward looks great. However, funds do have their own agenda.