US Retail Gasoline Climbs 4.7cts, 74.6cts above Year Ago --The average price for all formulations or regular grade gasoline increased 4.7cts to $2.655 gal for the week-ended Feb. 22, according to the Energy Information Administration. The average price is up 74.6cts gal compared with the same week in 2009. In the
Midwest
, prices rose 10.2cts at $2.605, 79.7cts more than the comparable year-ago period.
On Highway US Diesel Average Surges 7.6cts to $2.832 Gal --The national average for on-highway diesel fuel increased 7.6cts to $2.832 gal for the week-ended Feb. 22, the Energy Information Administration reported. The weekly average is 70.2cts above the comparable year-ago period. In the
Midwest
region, prices increased 8.9cts to $2.794 gal, which is 72.3cts more than last year.
Reduced Oil Shipments Seen on the Horizon --Crude oil exports from Organization of Petroleum Exporting Countries are expected to decline sharply in the second week of March, according to the latest Oil Movements report. The report, which analyzes OPEC supply based on oil tanker data, shows exports from the 12-member group dropping by 180,000 bpd in the week-ending March 13 to 23.0 million bpd. Exports for the prior week also fell by the same volume. Most of those declines in OPEC exports will come from the
Mideast
, which would see a drop of 310,000 bpd at 16.97 million bpd in the week-ending March 13, while four-week average exports from the region is seen down 420,000 bpd from the 17.39 million bpd for the prior four-week period. The decrease in exports suggests OPEC members are complying with a pledge to tighten compliance with agreed to cuts. The cartel decided to cut 4.2 million bpd from its August 2008 output level starting Jan. 1 2009. No output changes have officially been made since.
Check Your Inventory -- as the calendar has rolled over again it is time to take that climb to the top of the ladders of your bins and see what's up inside -- as temperatures have began their springtime swings now is when storage problem can get out of hand in a really big hurry -- take the time to see for yourself that NOTHING is going on in your bins
Crop Revenue Guarantees Established -- now that the calendar has rolled over to March the period of price discovery for revenue based crop insurance coverage has been established -- the base prices are below
Since we now have the spring prices established you can begin calculating what type of coverage that your operation desires to carry for the 2010 growing season -- it's really pretty simple math -- what you need are your farm(s) APH (Actual Production History) and the spring prices -- multiply the 2 together and then multiply by the various coverage levels available to you -- in the example above I have used the 75% coverage level to demonstrate the amount of revenue guarantee that would be available at the 155 and 48 bu APH levels -- remember you have until Monday, March 15th to make changes to your coverage election or to signup for insurance
EFFINGHAM EQUITY GRAIN COMMENTARY 3-2-2010
RENEWED LIFE FOR SOYOIL --The $1 a gallon biodiesel tax credit would be revived for 2010 under a jobs and tax-cut bill under consideration in the Senate, Finance Committee leaders said Tuesday. A vote on the bill, which was unveiled on Monday and would be the second in a series of job creation legislation, is possible later this week. The biodiesel credit expired at the end of 2009. About 12 percent of
U.S.
soyoil is used to make biodiesel. The American Soybean Association says production has virtually ceased since expiration of the credit. Traders in soybean oil on the Chicago Board of Trade have been watching whether the credit would be restored as it would improve market demand. Besides renewing the $1 biodiesel credit through 2010, the bill extends the small agri-biodiesel producer credit of 10 cents per gallon. It also extends through 2010 the $1.00 per gallon tax credit for diesel fuel created from biomass. Altogether, the biodiesel incentives are estimated to cost $1 billion over 10 years. The bill also has a disaster-relief package for farmers, estimated at $1.98 billion. The package is a priority of Senate Agriculture Committee leader Blanche Lincoln, of
Arkansas
. Heavy rains disrupted the harvest in the South last fall. The bill would deny cellulosic bio-fuels tax credits to so-called "black liquor," a byproduct of paper-making that is used to fuel paper plants. Give us call at Prime Ag and let us know your views – 1-800-211-1757.
"Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Opinions, market data, and recommendations are subject to change at any time. The information contained on this document does not constitute a solicitation to buy or sell futures or options by Prime Agricultural Investors, Inc.”
Federally Inspected Slaughter -- last week's cattle run was 12,000 head greater than the week before and 1 pound heavier as the cattle packers were aggressive buyers last week -- on the pork side we find basically the same number of pigs that came to town but 1 pound lighter than the week before and 2 pounds lighter than a year ago demonstrating that the pork industry appears to be very current on inventory
Prior Week Slaughter (Head)
Average Carcass Weight
YTD Slaughter
YTD % Change
Beef
632,000
775
5,152,000
0.1%
Pork
2,163,000
202
17,459,000
- 6.6%
Livestock Manure Makes front page of
Washington
Post --In a Monday front-page story, the Washington Post examined the growing issue of animal manure as a water pollutant, and traced the fault back to high-density farm practices. Whether the livestock in question is poultry, hogs or cattle, the practice of raising them on large farms banking on efficiencies of size produces more manure than can be effectively and safely dealt with in one place, the Post concluded. (Free registration required on the Post site to gain access to the article.) The age-old farming equation of using the manure in fields and then feeding the crops to the animals is out of balance with a waste stream of modern proportions, the report says. One study, by researchers at
Cornell
University
, is quoted as finding that nitrogen in the environmental "has increased by at least 60 percent since the 1970s," the paper says. Modern solutions, such as companion factories that turn the manure into dry, odorless, lightweight and easily transportable fertilizer pellets, are constrained by a lack of demand for the end product, the paper notes. As a result, the story says, excess manure runs off into aquifers and waterways, contributing to so-called dead zones in which algae, fed by the nitrogen in the manure, bloom and then deplete the oxygen in the water as they die, killing other plants and animals in the area. The number of these dead zones has grown to 230 now, from 16 in the 1950s, according to researchers interviewed by the Post. The report pointed out that, unlike man-made pollutants, manure has little in the way of regulatory oversight — so far. "The EPA has signaled an intent to tighten its grip," the story said, noting that reducing manure run-off into waterways is one of the agency's six newly announced "national enforcement initiatives." In addition, there are various legal efforts to force companies to take responsibility for damages allegedly caused by manure streams from large farms, in
Oklahoma
and around the
Chesapeake Bay
, for example.
Poultry Business Taking a Hit --U.S.poultry companies are taking a "big hit" from tariffs placed on
U.S.
chicken imports by
China
in February as the repercussions reverberate across the industry, the USA Poultry & Egg Export Council said.
U.S.
companies exported $649.2 million worth of chicken products to
China
last year, making
China
the second-largest importer of
U.S.
chicken behind
Russia
, according to USAPEEC. But tariffs of up to 105.4 percent on
U.S.
chicken imports that went into effect on Feb. 13 have caused that market to dry up. Companies have 20 days to appeal the decision. "The anti-dumping duties exclude
U.S.
chicken from the Chinese market. It just makes it not feasible to ship there. We're out of the market, period," USAPEEC spokesman Toby Moore told reporters. About half of the exports to
China
are chicken paws, which have little value in the
United States
but can fetch 60 cents to 80 cents a pound in
China
. The remainder consists of wing tips, mid-joints and leg quarters. Other markets such as Hong Kong, the
Philippines
and
Vietnam
are absorbing some, but not all, of the
U.S.
chicken that would have been destined for
China
. "We're hearing some companies are just shutting down paw production completely,"
Moore
said in an interview.
Carbon Credits Traded --A new report indicates $74 million worth of carbon was traded on the
U.S.
offset market in 2009, according to Point Carbon, an independent provider of market intelligence, analysis, forecasting and advisory services for the energy and environmental markets. Approximately 19.4 million tons (Mt) of carbon dioxide equivalent (CO2e) was traded. The report describes a growing and surprisingly mature market, even as volumes have been held back by policy uncertainty. The supply of reductions in 2009 reached an all time high of 29 million tons (Mt) of CO2e, reflecting a 13 percent increase from 2008. Of those credits, many were moving towards certification by the Climate Action Reserve, a leading North American offset standard and registry, which accounted for 65 percent of the traded value in the 2009
U.S.
offset market. – Editorial Comment – if my math is correct when you divide 74 million dollars by 19.4 million tons of carbon you get $3.81 per ton – that is the real 1st trading value I have ever seen for a carbon credit
USDA / School Lunch Program --Agriculture Secretary Tom Vilsack said Tuesday that USDA will dole out $6.5 million in grants to seven state agencies for training and technology projects to improve the quality of school meals and administration of the National School Lunch Program. The grants will help state agencies implement training, monitoring and technology solutions to improve program effectiveness. The grants will target school food authorities (SFAs) that have demonstrated a high level of, or a high risk for, error in program operations. "Our schools are on the frontline of efforts to improve child nutrition and the nutritional quality of school meals, and the funding we are announcing today will help reduce barriers to participation, improve program access and enhance the health of the school environment," Vilsack said in a news release.
Reduced Oil Shipments Seen on the Horizon --
USDA / School Lunch Program --
