Further Cuts to Russia, Ukraine and EU Wheat

Further Cuts to Russia, Ukraine and EU Wheat

• IKAR lowered the projected Russian wheat crop to 78 million tonnes from 79.5 previously.
• France’s Agriculture Ministry lowered the estimate of French soft wheat production to 31.3 million tonnes, compared to 39.5 million last year
• ProAgro also lowered the forecast of the Ukraine wheat crop to 26.1 million tonnes from 26.65 million in June.
• Very early yields from the Ukraine wheat harvest, with just 2% complete, were 33% below last year.
• 在生长季节的一部分，收获处于早期阶段，南部地区面临不利的天气。
• USDA last reported Ukraine’s crop 26.5 million tonnes and Russia’s at 77 million tonnes.

FBN’s Take On What It Means：USDA可能会在本周五的报告中解释欧盟和俄罗斯的较小农作物，但预计世界股票的减少很大。美国，欧盟和黑海天气预报不是理想的。黑海早期收获和欧盟作物减少的收益率差，美国可能会有机会增加出口，尤其是在营销年度晚些时候。

Ethanol Margins At Risk

• Ethanol production margins have rebounded strongly over the last month as production and demand volumes recovered from their spring collapses.
• While the current production environment is strong, a few developments in recent weeks threaten to cause production margins to fall.
• 自最近取消了许多锁定命令以来，冠状病毒流行已经恢复了强度
• The federal government has placed an indefinite hold on its upcoming biofuels mandate rulemaking.
• Corn prices have risen approximately 10% from the recent lows, increasing the cost of the major feedstock.

FBN’s Take On What It Means: The rebound in ethanol since the extreme lows in April has been impressive, but continued expansion is needed to work through large current and future corn stocks. Corn prices can be accounted for and the Renewable Fuels Standard will likely be enforced into 2021, but the industry can’t afford another lapse in demand if the economy doesn’t continue to recover.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

—Kevin McNew