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U.S. corn, wheat and soybean futures all gained on Tuesday, supported by ongoing considerations about disruptions brought on by Russia’s battle on Ukraine, with an additional sprinkling of optimism over elevated demand for biofuels.
President Biden’s plan to waive the ten% ethanol mixing cap, which might allow retailers to mix 15% ethanol into the gasoline inventory between June 1 and September 15 – a time when it’s usually banned due to smog considerations – is “pleasant for corn, and probably for (soy-based) biodiesel too,” Ted Seifried, chief agriculture strategist for the Zaner Group, advised Reuters.
The president’s resolution “might add one other 25M-45M bushels of corn to the U.S. ethanol grind amid the extra demand,” AgResource stated.
Might corn futures (C_1:COM) in Chicago settled +1.5% to $7.76 1/4 per bushel after reaching $7.79, the contract’s highest since March 7, whereas July wheat (W_1:COM) ended +2.2% to $11.12 1/2 per bushel, helped by an outlook for dry climate for winter wheat-growing areas, and July soybeans (S_1:COM) closed +0.9% to $16.70 1/4 per bushel.
ETFs: (NYSEARCA:CORN), (WEAT), (SOYB), (DBA), (MOO), (JJA), (JJGTF), (GRU), (TAGS)
The world is dealing with “a multiyear downside” in meals provide because the battle drives international costs increased and disrupts manufacturing of staple crops, the manager director of the U.N.’s World Meals Program stated.
Biden’s transfer on ethanol mixing comes simply days after the EPA stated it will not require refiners to purchase RIN compliance credit to satisfy quotas from the 2018 compliance 12 months.