Agriculture News

From the Chicago Board of Trade

Corn
The world stocks/usage ratio for corn is already at the lowest since 1973, and with planted area down in the US this coming year, continued tightening of stocks is a concern. China exports for the 2007/08 season were cut in half to just 500,000 tonnes, the lowest since 1995/96.

Soybeans
The USDA believes that palm oil stocks will rebound due to increased production in Malaysia and Indonesia and that soybean oil stocks will tighten due to strong demand from China and increased use in Argentina due to bio-diesel. With palm oil at a record discount to soybean oil, soyoil export demand from the US could slow. While the USDA raised their estimate for soyoil exports significantly in the report yesterday, usage for biodiesel was lowered to just 2.8 billion pounds from 3.4 billion last month.

Update
Saw this right after posting what was above. Key points below, VeraSun (ethanol producer) is still slightly above breakeven even after the run up in corn prices in the 4th quarter (may have had some of it hedged, don't know), increased production substantially, and are still building facilities to expand production. I said a little over a year ago that I do not think that ethanol plants will start thinking about cutting production until corn reaches $6.50 a bushel. It may be even higher.

http://www.marketwatch.com/news/story/verasun-energys-profit-eclipsed-higher/story.aspx?guid=%7B574D16F9%2DADC3%2D4A0A%2D84B3%2D2C610CD9920B%7D

VeraSun Energy Corp.'s fourth-quarter net profit fell 81% in the face of lower ethanol prices and higher corn costs, even as revenue more than doubled, the biofuels maker reported Wednesday.

The Brookings, S.D.-based company Verasun Energy Corp (VSE) said income dropped to $4 million, or 4 cents a share, down from $21.4 million, or 27 cents, earned in the year-earlier fourth quarter.

and increased production

In the final three months of 2007, the company sold 134.4 million gallons of ethanol, more than twice the amount sold a year earlier.

and are still expanding prodcution

Aside from the three plants opened during 2007, VeraSun noted that it's kicked off construction on facilities in Welcome, Minn., and Hartley, Iowa, and expects to begin start-up operations at both plants by the end of the second quarter. In addition, the company expects to start up its Bloomingburg, Ohio, plant by the end of the first quarter.