The World Agricultural Supply and Demand Estimates (WASDE) report released by USDA on October 11, 2018, indicated slightly lower 2018/19 corn production to 14.778 billion bushels, compared with the previous month projection (14.827 billion bushels), but up 174 million bushels (1.2 percent) year-over-year. If realized, 2018/19 production would be the second largest after 2016 (15.148 billion bushels). Production was revised down because of a lower yield forecast this month. Based on conditions as of October 1, 2018, the average 2018/19 corn yield forecast was reduced 0.6 bushels per acre to 180.7 bushels per acre from the September forecast (see Table 1). The latest yield forecast for 2018/19 was up 4.1 bushels per acre from the 2017/18 yield estimate (176.6 bushels per acre). If this yield projection is reached, this would be the highest on record. Among the top five corn producers, Iowa, Illinois, Nebraska and Indiana are projected to have state record yields with 204, 212, 195, and 194 bushels per acre, respectively. Minnesota’s yield is expected to decline to 191 bushels per acre year-over-year (193 bushels per acre), but if achieved this still would be the second largest on record (see Table 1).
In this month’s article, we look at pure biodiesel production, imports and potential profitability for the first seven months in 2018 and compare that information to the same period in 2017. A previous update covering pure biodiesel production in 2017 can be found in the April 2018 Report. U.S. pure or traditional biodiesel is known as Fatty Acid Methyl Ester (FAME) and is our focus here in this report, excluding renewable diesel (also known as Hydrotreated Vegetable Oil or HVO).
An analysis done by Renewable Fuel Association (RFA) shows that blending 10% ethanol (E10) in recent months has reduced wholesale gas prices by approximately 14% which indicates saving at least $0.27/gallon. If 15% ethanol blends (E15) were used in place of E10 in approved motor vehicles, the savings for consumers would be at least $0.34/gallon, or 17%. These numbers clearly indicate even larger savings using E15 at the pump for consumers. The published white paper from RFA can be found here.
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