05.17.2024
Uncertainty with 45z tax credit may affect Q1 2025 biofuel contracts
The expiring BTC provides a one dollar per gallon blenders credit up front with an additional 30 to 40 cents of credit to producers on the backend. Crimson...
We feel that a drop in conventional corn prices will likely accompany another leg down in organic corn prices. The differential between organic corn prices (Jacobsen – Midwest) and CME corn has been as wide as $6 per bushel and as narrow as $2/bu. on a monthly basis. The current level of 3.7 is slightly below the average spread. You can see from the chart that the difference narrowed to its historical low during early 2021, driven by the lack of demand during the pandemic. While conventional corn dropped, the decline in organic corn was the catalyst for the contraction in the difference. Additionally, it does not appear that organic corn prices fell while conventional corn rose for an extended period.
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