DENVER, CO – Grain and oilseed prices have slipped from their third-quarter highs but may rebound due to short-term tight supplies and increasing demand for renewable biofuels.
According to a new Quarterly report, Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division, explains that the export picture is cloudy due to continued supply chain bottlenecks in the Gulf Coast region for the next few months following Hurricane Ida.
There are some winners in the space today, including farm supply cooperatives and ag retailers who are benefitting from strong demand for crop inputs. Currently, fertilizer prices are skyrocketing and chemical shortages due to supply-chain constraints are just a few short-term risk factors for the retail sector.
Biofuels are another area where Kowalski expresses some concern.
“The U.S. fuel ethanol sector saw mixed performance during the past quarter as production fell but operating margins increased dramatically,” he says. In addition, the regulatory environment remains dynamic and biofuel policy continues to be an area of friction between farmers, ethanol producers, and fossil fuel refineries.” Finally, there are rumors of a pending reduction of the Environmental Protection Agency’s proposed blending volume requirements (RVO) under the renewable fuel standard (RFS).
(SOURCE: All Ag News)
