Markets Remain Relatively Busy

CHICAGO - Apr 3/07 - SNS -- International agriculture commodity markets remain relatively busy, helped by Japan's first wheat import tender of the new fiscal year, which began April 1.

January US ethanol production measured 375,000 barrels per day, which was up from 356,000 bpd, or 5.3%, in the previous month and up from 275,000 barrels per day, or 30.2%, from the same month last year, note Chicago Board of Trade (CBOT) analysts.

Total ethanol production stood at 11.621 million barrels compared to 11.023 million barrels the previous month and 8.942 million barrels last January. Total production for the first 5 months of the 2006/2007 season reached 53.2 million barrels.

"In order to reach the USDA corn for fuel ethanol projection, we need ethanol production to average 12.9 million barrels per month," CBOT analysts said.

"Total US ethanol stocks stood at 8.5 million barrels in Jan vs. 8.7 million barrels the previous month and vs. 6.173 million barrels last year. Coming down in stocks with the heavy production pace is a positive development. The political push for more ethanol usage could boost demand and traders may see the need to build a weather premium."

Soybean oil is similarly helped by rising world biofuel usage. "Brazil shifts to a 2% bio-diesel mix in 2008, and Europe has agreed to eventually push for a 10% bio-fuel mix. The Supreme Court ruling yesterday may cause another push toward lower emissions for US auto companies, eventually, and biofuel could come into play to combat current high emissions," CBOT analysts report.

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