Forecast for more ethanol use, EPA requirement benefits corn

The U.S. Department of Agriculture's monthly supply and demand report is bullish on ethanol, saying that demand for corn as ethanol feedstock will be up 100 million bushels from previous estimates and noting that December corn usage for ethanol was up 16 percent from the previous year.

The USDA said that corn used for ethanol is projected 100 million bushels higher, reflecting the latest ethanol production data from the Energy Information Agency.

November's record ethanol production was up 3 percent from the previous record in October as higher prices for ethanol and distillers grains boosted ethanol producer returns. November-December corn use for ethanol was up 16 percent from the same period in 2008-09. Although returns have declined since November, recently lower corn prices continue to support profitability for ethanol producers.
EPA: Oil imports to fall 10% as biofuels rise

One of the arguments made most often for increasing the use of ethanol and biodiesel is to reduce U.S. imports of foreign oil. Now, we have an idea of how much difference the 2007 energy law would make, with its mandate that motorists use 36 billion gallons of biofuels by 2022.

The Environmental Protection Agency's 1,120-page regulatory impact analysis said oil imports would fall by 9.5 percent by 2022, or 900,000 barrels a day. Put another way, the nation would spend $41.5 billion less on imported oil and petroleum products, or 9.1 percent less.

The agency doesn't factor in the cost to taxpayers of subsidies for biofuels, which range from 45 cents a gallon for corn ethanol to $1 a gallon for biodiesel and $1.01 a gallon for cellulosic biofuels. Were those figured in, much of those savings to the economy on oil imports would disappear.

The savings in spending on imports are a little smaller, $37.2 billion, when calculating the amount of biofuels the country is likely to import because of the mandates.

The biodiesel industry need not fear much competition from foreign sources. Even though there is no special tariff on biodiesel as there is with ethanol, biodiesel is likely to go to Europe and other places where retail fuel prices are higher, according to the agency.
Hog markets shake off CBS-TV antibiotics report

When it comes to moving the commodity markets, early indications are that Katie Couric and CBS News don't have quite the impact on the livestock markets as, say, the H1N1 flu virus or mad cow disease.

Hog prices rose on Wednesday, a day after the first of a two-part Couric-narrated report appeared on CBS taking the livestock industry to task for using antibiotics. On Thursday, hog prices opened a cent lower at 67 cents per pound for the April contract.

That price is still well above the 46 cents per pound live hog futures brought in August.

"The H1N1 thing was a bigger deal probably than any story," said Don Roose of US Commodities in West Des Moines.

Roose recalled the mad cow disease scare of a decade ago that "caused the bottom to fall out of the cattle market."

"I've had some calls about the CBS story, but I haven't seen anybody trading on it," Roose said.

What is working against the hog market now, Roose said, is the still-large supply of animals against static demand. Supermarkets moved a lot of pork products during the Thanksgiving/Christmas holiday period but now are back to regular sales patterns.

source: desmoinesregister