UPDATE for September 14th, 2023

Biofuels For SAF, USDA Worksheet & 3-Month Outlooks

As expected, Tuesday’s USDA report included more corn and soybean acres than they had projected earlier in the season. Corn acres increased by 774,000 and soybean acres by 95,000. Yields for each were reduced slightly but the net result increased corn total production by 23 million bushels to 15.134 billion which if correct would break the record for corn production by 60 million bushels. The soybean yield estimate was set at 4.146 billion bushels which amounted to a decrease of 59 million bushels, these adjustments moved soybean projections to well-below record levels.

Tuesday, U.S.D.A. Secretary Tom Vilsack announced that his department is going to spend $400,000 to adjust a federal greenhouse emissions model that will ensure that aviation fuel made from corn-based ethanol will be eligible for subsidies. “We’re working on the modeling to make sure that there’s a broad array of feedstocks that can qualify, including ethanol.” The airline industry and the Biden administration believe that the use of sustainable aviation fuel (SAF) is the key to reducing emissions. The Inflation Reduction Act passed last year includes hefty subsidies to SAF producers that can show their fuels emit 50% less greenhouse gas than gasoline. This multi-billion-dollar market is vital to the biofuels industry, and they are working hard to be sure they are not left out.

Low water levels along the Mississippi are restricting the flow of barge traffic causing serious concerns about exports. At the same time the worst drought in many years has caused a backup in ship and barge traffic through the Panama Canal. Because of the extremely low water levels the Panama Canal Authority has reduced the number of vessels allowed to pass through each day in an effort to conserve water. There really is very little hope for improvement either over the next month or so as little precipitation and above normal temps are expected to remain over much of Panama and Central America. The lack of adequate precipitation along both of these vital transportation routes makes it hard to see how U.S. exports could improve anytime soon.

Current water levels along the Mississippi River in Memphis are 9.8 feet below normal. The government projects that the water level could fall to near record lows by next Friday.

Record Low Water Levels @ Memphis via weather.gov

Low Water Records

(1) -10.81 ft on 10/21/2022

(2) -10.70 ft on 07/10/1988

(3) -9.80 ft on 09/19/2012

(4) -9.20 ft on 01/03/2000

(5) -9.10 ft on 01/17/2001