New grain terminal will be a basis booster predicts GFO chair

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Comments

Exports have always been the skinny cow for the grain farmers. => grain has to be cheaper to be exported. and exports can appear/disappear overnight.

and NO quicker pace doesn't imply better basis.

so yes more competition is always welcomed, but in the niagara +10c not more...

Simon Jacques

Agreed, when we export at a loss we subsidize foreign consumers.

(A) Ethanol mandates were foisted on us because of the fear-mongering tactics of those who warned of energy insecurity (a hard sell in Canada because we have long-been a net energy exporter), imminent oil shortages and crude oil prices in the $140 per-barrel range.

Ten years later, with:

(1) oil prices about $90 - $100 per barrel less than that, and no price increase on anyone's horizon.
(2) North American energy insecurity a bad dream thanks to, among other things, shale-oil technology.
(3 the dubious effects of ethanol on the environment better known
(4 the marginal energy replacement ratios of ethanol better known
(5) ethanol's adverse effect on the price of food and livestock producers too-well known

government has little reason to retain ethanol mandates and every reason to get rid of them.

Therefore, with corn-ethanol ever-increasingly looking like a sick dog looking for a place to die, building an export facility to export grains lest ethanol mandates end, would appear, on the surface, to be somewhat less risky than what it might otherwise be.

(B) Mr. Jacques is entirely correct - what will get exported through Hamilton by boat will tend to get re-imported through Sarnia by truck. So, what leaks out the bottom of the Ontario corn "bath-tub" in the form of increased exports originating in the Hamilton area, is usually replaced by increased imports of corn into western Ontario from Michigan and Ohio and poured into the top of the corn "bath-tub".

Stephen Thompson, Clinton ON

Just last night the news showed gas stations in the GTA that were closed because of a gas shortage . Only one company though . Seems fishy to me . Ethanol is one way to help keep the pipelines full along with reducing emissions .

You just don't get it and perhaps never will,the Governments in this Country and the US are slowly being influenced by an ever increasing population with a environment well-being agenda.With huge supplies of oil the ethanol mandate makes little sense but then so does spending huge amounts of money subsidizing Wind Turbines and for such little returns.
The only reason these two continue to eat up taxpayers dollars is the public opinion that they are "green" and good for the environment.Your economic principals mean little compared to the perceptions and emotions of the largely ruling urban population and Governments know it.

(A) "Shorting" ethanol?
It was smart by ag-leaders to linke Energy to Agriculture, oil went to the roof at 100$/bbl and corn was at 8$/BU :P

Flip side of it : oil 50$/bbl, oil 40/bbl, lower CAD ( temporary Basis Booster) but inputs costs for farming will rise faster (fert, chemicals, machinery eveything imported in USD).
IP Soybeans still offer decent premiums ( BUT the other leg of grain farming revenues has been amputated).

Costs are Rising and knowing that grain farming is ALREADY very low margin business, I am optimist in life and Agriculture but not in the Markets.

-I think southwestern-ont farmers farming for a living are in a risky vulnerable position (partly because of the policies of the past but mostly because the Market has reversed).

The ultimate hedge might be to take advantage of the following discrepancy: sell some cropland as 95% or more of the value is farming capital, not the operations.

In 2015, Land in "south-west part of the Bath-Tub" is priced at Corn 8 USD/BUSHEL and even with exceptional Yield in Essex/Chatham, even when you amortize land costs on 50 yrs can you payback the land and make a return ?

Fasten your seatbelt, Difficult Times Ahead.

Simon Jacques,

I read an article in the Tri State News Publication that was about another Ethanol Plant proposed for the State, that would be the 6th one I believe. The article went on to say their biggest market was in Canada, anyone know if this is true??

I believe so, Canada is somewhat important for U.S Ethanol Merchants.

Essentially when Ethanol is blended with Canadian refined products or Ethanol, they can cheat EU.

Canada Country of origin is used to re-export to Europe/other countries to circumvent the 91$/MT EU tariff on U.S Ethanol exports.

Simon Jacques

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