About The Author

Jack Scoville

Jack Scoville is an often quoted market analyst in the grain and soft commodities sectors. You will find his commentary throughout the Reuters, Wall Street Journal, Dow Jones, Bloomberg, and Barron's publications. Contact Mr. Scoville at (312) 264-4322

DJ CBOT Delivery Intentions: Totals – Sep 5
Source: CME Group
Contract Quantity Next Trade
Commodity Month Delivery Day Assigned Today Date Available
SOYBEAN MEAL September Sep. 06, 2019 520 Sep 04, 2019
CORN September Sep. 06, 2019 694 Sep 04, 2019
KC HRW WHEAT September Sep. 06, 2019 12 Aug 30, 2019
SOYBEAN September Sep. 06, 2019 591 Sep 04, 2019
WHEAT September Sep. 06, 2019 293 Sep 03, 2019

DJ Sugar, Cereal Markets Pushed Global Food Prices Down in August
By Joe Wallace
Global food prices fell for a third consecutive month in August, the Food and Agricultural Organization of the United Nations said Thursday, driven by sharp declines in sugar and cereal markets.
The FAO’s index of food prices fell 1.1% from July to 169.8 in August, but remained 1.1% higher than it did in August 2018.
Cereal prices slumped 6.4% from July and were down 6.6% from August last year, the FAO said, as large supplies of wheat raised the level of competition between major exporters. Corn prices also dropped because of forecasts that the U.S. crop would be larger than many traders had anticipated, after unprecedented delays to planting during the wet spring.
Meanwhile sugar prices fell 4% from July, according to the FAO, “on the back of a weakening Brazilian real, which tends to incentivize sugar exports.” Expectations of large international sales of sugar from India and Mexico also weighed on the market.
These declines more than offset a 5.9% month-on-month jump in the price of vegetable oils, which reached an 11-month high on a rebound in global import demand and shrinking inventories in Malaysia.

DJ U.S. July Grain Exports-Sep 4
In kilograms (top) and in bushels (bottom), except flour in cwt and malt
in pounds. /1 denotes includes commercial and donated. Source: U.S. Department
of Commerce.
(*)NOTE: Year ago figures reflect data reported at that time.
Data includes Exports and Re-Exports.
——- In Kilograms ——-
Jul 19 Jun 19 May 19 Jul 18(*)
Barley 5,650,340 4,244,000 4,175,958 6,688,610
Corn /1 2,882,194,000 3,068,898,000 4,689,879,000 6,766,334,000
Sorghum 160,368,000 316,164,000 270,316,000 95,650,000
Oats 2,042,983 3,974,738 1,942,819 863,501
Rye 151,100 511,222 550,000 694,267
Wheat /1 1,943,232,013 2,156,254,975 2,801,109,478 1,773,053,877
wheat flour /1 23,524,471 20,788,616 21,801,686 18,461,293
Malt 29,026,195 33,663,862 39,536,628 36,176,598
——- In Bushels, CWT or Pounds ——-
Jul 19 Jun 19 May 19 Jul 18(*)
Barley 259,515 194,923 191,798 307,202
Corn /1 113,465,801 120,815,938 184,630,486 266,376,069
Sorghum 6,313,344 12,446,699 10,641,762 3,765,536
Oats 140,749 273,835 133,848 59,490
Rye 5,948 20,126 21,652 27,332
Wheat /1 71,400,821 79,227,995 102,922,098 65,147,909
wheat flour /1 518,626 458,311 480,645 407,002
Malt 63,991,817 74,216,124 87,163,359 79,755,760
1/Includes commercial and donated.

DJ U.S. July Oilseed, Meal, Oils/Fats Exports-Sep 4
In kilograms (top). Oils in pounds, soybeans in bushels, meal and hulls in
short tons (bottom). Source: U.S. Department of Commerce.
(*)NOTE: Year ago figures reflect data reported at that time.
Data includes Exports and Re-Exports.
——- In Kilograms ——-
Jul 19 Jun 19 May 19 Jul 18(*)
soybeans 3,680,451,200 3,193,552,152 2,560,436,948 3,426,697,714
soyoil 79,071,812 43,269,288 93,319,407 79,267,050
crude 68,326,636 33,517,763 80,309,787 61,380,449
refined 60,647 113,445 1,671 164,409
other/1 10,413,526 9,280,684 12,554,494 17,366,248
hydrogenated 271,003 357,396 373,455 355,944
cottonseed oil 1,411,674 4,018,852 1,585,127 8,421,946
crude 0 0 0 20,100
refined 671,731 3,268,241 861,300 1,586,347
other/1 739,943 750,611 723,827 6,789,204
hydrogenated 0 0 0 26,295
sunseeds 3,559,356 2,284,841 1,995 366,604
sunseed oil 3,923,345 8,687,316 8,445,942 3,732,352
rapeseed 13,022,019 24,595,212 4,916,672 15,484,539
rapeseed oil 8,296,136 8,889,462 7,490,362 8,569,622
crude 3,457,492 3,959,998 2,221,525 4,109,385
refined 4,838,644 4,929,464 5,268,837 4,460,237
linseed meal 0 66,719 266,278 117,738
cottonseed meal 7,131,502 4,744,546 6,108,089 9,654,811
soymeal 716,627,482 593,573,569 819,429,924 871,882,792
soymeal/flour 85,008,540 220,250,941 185,251,087 249,430,232
soymeal hulls 22,254,000 9,082,000 12,266,000 17,722,000
lard 1,587,791 5,566,310 1,855,826 565,241
edible tallow 9,228,080 9,760,551 10,089,035 8,087,287
inedible tallow 22,259,805 23,033,985 22,685,354 26,286,233
ch white grease 0 499,113 6,531 24,131
——- In Bushels, Pounds or Short Tons ——-
Jul 19 Jun 19 May 19 Jul 18(*)
soybeans 135,232,044 117,341,750 94,078,987 125,908,295
soyoil 174,323,535 95,392,468 205,734,111 174,753,962
crude 150,634,473 73,894,031 177,052,804 135,320,750
refined 133,704 250,103 180,054 362,460
other/1 22,957,899 20,460,409 27,677,926 38,286,030
hydrogenated 597,459 787,923 823,327 784,722
cottonseed oil 3,112,209 8,860,054 3,494,607 18,567,216
crude 0 0 0 44,313
refined 1,480,914 7,205,239 1,898,842 3,497,297
other/1 1,631,295 1,654,814 1,595,766 14,967,635
hydrogenated 0 0 0 57,971
sunseeds 7,847,038 5,037,213 4,398 808,224
sunseed oil 8,649,497 19,152,257 18,620,118 8,228,429
rapeseed 28,708,643 54,223,170 10,839,408 34,137,571
rapeseed oil 18,289,852 19,597,912 16,513,424 18,892,786
crude 7,622,466 8,730,303 4,897,625 9,059,645
refined 10,667,386 10,867,610 11,615,799 9,833,141
linseed meal 0 74 294 130
cottonseed meal 7,861 5,230 6,733 10,642
soymeal 789,938 654,296 903,258 961,076
soymeal flour/me 93,705 242,783 204,202 274,947
soymeal hulls 24,531 10,011 13,521 19,535
lard 3,500,481 12,271,615 4,091,397 1,246,143
edible tallow 20,344,437 21,518,335 22,242,519 17,829,419
inedible tallow 49,074,478 50,781,253 50,012,653 57,951,234
ch white grease 0 1,100,356 14,398 53,200

DJ U.S. July Grain Imports-Sep 4
In kilograms, from the U.S. Commerce Department, converted to
pounds by Dow Jones.
—-Jul 2019—- —-Jun 2019—-
kilograms pounds kilograms pounds
durum wheat 176,702 389,628 903 1,991
spring wheat 7,303,009 16,103,135 6,097,718 13,445,468
winter wheat 288,796 636,795 442,207 975,066
wheat/meslin 12,477,540 27,512,976 46,472,413 102,471,671
TOTAL WHEAT 20,246,047 44,642,534 53,013,241 116,894,196
barley 8,568,182 18,892,841 4,994,349 11,012,540
oats 2,180,103 4,807,127 1,673,948 3,691,055
corn 21,988,343 48,484,296 18,716,826 41,270,601
other corn 3,880,542 8,556,595 3,235,656 7,134,621
TOTAL CORN 25,868,885 57,040,891 21,952,482 48,405,223

DJ U.S. July Soymeal, Vegetable Oils/Oilseed-Sep 4
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones.
—-Jul 2019—- —-Jun 2019—-
kilograms pounds kilograms pounds
coconut oil 45,682,990 100,730,993 40,278,099 88,813,208
palm kernel oil 43,478,535 95,870,170 8,283,916 18,266,035
palm oil 147,480,219 325,193,883 93,992,419 207,253,284
soybean 33,963,133 74,888,708 17,035,226 37,562,673
soymeal 0 0 0 0
soyoil 16,570,494 36,537,939 15,935,593 35,137,983
rapeseed oil
edible 177,092,211 390,488,325 149,475,753 329,594,035
rapeseed oil,
inedible 35,335 77,914 53,517 118,005

Alerts History
• 04-Sep-2019 03:22:05 PM – INTL FCSTONE SAYS ESTIMATES U.S. 2019 CORN CROP AT 13.809 BLN BUSHELS (PREVIOUSLY 13.992 BLN), YIELD 168.4 BU/ACRE (PREVIOUSLY 167.4)
• 04-Sep-2019 03:22:30 PM – INTL FCSTONE SAYS ESTIMATES U.S. 2019 SOYBEAN CROP AT 3.661 BLN BUSHELS (PREVIOUSLY 3.743 BLN), YIELD 48.3 BU/ACRE (PREVIOUSLY 47.2)
INTL FCStone raises U.S. 2019 corn yield forecast, trims production – Reuters
04-Sep-2019 03:34:23 PM
To view this story on Eikon, click here
CHICAGO, Sept 4 (Reuters) – Commodity brokerage INTL FCStone INTL.O on Wednesday raised its estimate of the average U.S. 2019 corn yield to 168.4 bushels per acre (bpa), up from 167.4 in its previous monthly report released Aug. 1.
The firm lowered its corn production forecast to 13.809 billion bushels from 13.992 billion previously.
INTL FCStone raised its forecast of the U.S. 2019 soybean yield to 48.3 bpa, up from its Aug. 1 figure of 47.2. The firm forecast U.S. soybean production at 3.661 billion bushels, down from 3.743 billion previously.
(Reporting by Julie Ingwersen
Editing by Marguerita Choy)
(( Julie.ingwersen@thomsonreuters.com ; 1-312-408-8710; Reuters Messaging: julie.ingwersen.thomsonreuters.com@reuters.net ))(c) Copyright Thomson Reuters 2019. Click For Restrictions – https://agency.reuters.com/en/copyright.html

WHEAT
General Comments: Wheat markets were higher as the US Dollar moved sharply lower. The weaker Dollar helped support some demand ideas. Futures were oversold on some technical analysis and this created some buying interest as well. Wheat remains a weak market as the rallies were not enough to force any major changes in chart trends. The weekly charts show that Minneapolis Spring Wheat and Chicago Hard Red Winter futures are at multi year lows. Chicago Soft Red Winter futures are weak but are not close to making multi year lows. The weekly export sales reports have shown improved demand and there are ideas that feed demand for Wheat has been strong. US Wheat demand has been hurt by the strength of the US Dollar against other exporter currencies as well as some quality concerns as some areas saw a lot of rain during the planting and growing season and might not have good protein. Russia and now Europe have been able to dominate sales into many world buyers lately. The Winter Wheat harvest is mostly over, but the Spring Wheat harvest is still progressing slowly. USDA will issue new supply and demand estimates for Wheat. The reports might not show many major changes on the supply side or the demand side.
Overnight News: The southern Great Plains should get scattered and light showers on Saturday, otherwise mostly dry conditions. Temperatures should be near to above normal. Northern areas should see mostly dry weather this week and scattered showers this weekend. Temperatures should be near normal. The Canadian Prairies should see mostly dry weather but showers are possible in the north. Temperatures should be variable.
Chart Analysis: Trends in Chicago are down with objectives of 448 December. Support is at 451, 442, and 439 December, with resistance at 466, 469, and 473 December. Trends in Kansas City are down with objectives of 376 December. Support is at 381, 380, and 377 December, with resistance at 398, 400, and 406 December. Trends in Minneapolis are down with no objectives. Support is at 487, 485, and 482 December, and resistance is at 500, 511, and 514 December.

RICE
General Comments: Rice closed a little higher again yesterday in quiet trading. Harvesting it starting to get more active in Arkansas but the harvest period in that state will be an extended affair this year due to the drawn out planning period at the start of the season. Frequent rains made for very difficult and slow planting this Spring. Some initial harvesting has been done already in Arkansas and field yield reports are good. However, these are the best crops and yields are likely to go down again as the harvest progresses. Field yield reports from Texas and Louisiana are less than last year in all cases and average to below average. Milling quality is said to be good to very good at this point in the harvest. Smut has been reported in Texas away from Houston, but the smut has not affected the milling quality so far. The major part of the crop is yet to be harvested, but indications are that USDA is too high in its yield and harvested area estimate in its reports so far this year. Traders will look for reduced production estimates in the updates next week.
Overnight News: The Delta should get mostly dry conditions. Temperatures should be near to below normal.
Chart Analysis: Trends are mixed to up with objectives of 1211 November. Support is at 1177, 1174, and 1155 November, with resistance at 1200, 1209, and 1224 November.

CORN AND OATS
General Comments: Corn closed lower on weaker demand ideas and on ideas of improving crop conditions as some rains brought cool weather to the Midwest this week. Oats were a little higher. It should be mostly dry and cool for the rest of the week and crop progress should remain very slow. The crop needs warmer weather to get to maturity but is getting mostly below normal temperatures at this time. The crop needs time to develop after being planted late this year and futures should retain a weather premium as an early or even near normal first freeze date could cause additional losses. Harvest has been active in parts of the southern US. Yield reports from Texas are good according to AgWeb, with some talking about record yield potential in the state. The Carolinas have been harvesting and yields have been mostly very poor due to the hot and dry weather seen in June. USDA will issue its next round of production reports next week and the yield for Corn will be a primary focus of the trade. USDA is expected to drop yields a bit as it makes its first survey based estimate. Some think that USDA could drop yields back to its June estimate of 166 bushels per acre. Demand ideas have been hurt due to the slow export pace so far and domestic demand was hurt when President Trump approved waivers on ethanol consumption for 31 small refineries. Export demand has been soft.
Overnight News:
Chart Analysis: Trends in Corn are down with objectives of 353 December. Support is at 355, 352, and 349 December, and resistance is at 365, 368, and 370 December. Trends in Oats are mixed. Support is at 263, 262, and 259 December, and resistance is at 268, 272, and 273 December.

SOYBEANS AND PRODUCTS
General Comments: Soybeans and Soybean Meal closed higher while Soybean Oil closed lower. There are questions about how many pods are on the plants and how long it will take the pods to fill with beans and the current cool weather is not helping production ideas increase. The pod counts reported by producers are very low and this was especially true for states east of the Mississippi River. The weather has been better lately and more flowering to create more pods has been reported but the market still expects less production when USDA releases its next update on September 12. The current Midwest weather remains cool and temperatures have hindered development and yield potential. The crop is very late and will need an extended growing season to reach full potential. Demand is a great unknown as the trade wars continue. Washington says that they and the Chinese are talking and that progress is being made. However, the two sides can’t seem to agree on a date for new negotiations after tariffs were increased on Chinese goods over the weekend as had been announced and scheduled. Demand ideas got a boost yesterday when USDA said Mexico bout over 450,000 tons of US Soybeans.
Overnight News:
Chart Analysis: Trends in Soybeans are mixed. Support is at 869, 859, and 855 November, and resistance is at 879, 882, and 897 November. Trends in Soybean Meal are mixed to down with objectives of 286.00 and 276.00 October. Support is at 293.00, 291.00, and 290.00 October, and resistance is at 298.00, 300.00, and 302.00 October. Trends in Soybean Oil are mixed. Support is at 2850, 2820, and 2800 October, with resistance at 2900, 2930, and 2960 October.

CANOLA AND PALM OIL
General Comments: Canola was lower again in range bound trading. A stronger Canadian Dollar helped create a little selling interest. The harvest was slow over the weekend due to rains, but there has not been a frost or freeze yet to hurt the seed. Reports from the field indicate good yields. Manitoba said its crop is just 20% harvested. It is usually over half harvested by now. Palm Oil was slightly lower after making new lows or the move. Futures recovered from the early losses and might be getting sold out. India increased its Palm Oil import tax by 5% yesterday. The market appears to be in a short term and shallow correction now. Export data from the private sources has been positive so far this month. Buying came as the China-US trade war is causing China to consider dropping quotas on world vegetable oils imports. The market still expects limited upside potential, but the charts show that the market has broken out to the upside. There are ideas that there is plenty of production and supply to meet any expected demand. Stocks in Indonesia have increased for four straight months.
Overnight News:
Chart Analysis: Trends in Canola are mixed. Support is at 445.00, 442.00, and 440.00 November, with resistance at 450.00, 453.00, and 456.00 November. Trends in Palm Oil are down with objectives of 2140 and 2090 November. Support is at 2180, 2150, and 2120 November, with resistance at 2240, 2260, and 2270 November.

Midwest Weather Forecast: Mostly dry this week, showers could return late in the weekend. Temperatures should be near to below normal.

US Gulf Cash Basis
Corn HRW SRW Soybeans Soybean Meal Soybean Oil
September +26 Dec +145 Dec +70 Sep +21 Nov +12 Oct N/A
October +32 Dec +77 Dec +21 Nov
November +43 Dec +77 Dec +29 Nov
All basis levels are positive unless noted as negative

DJ ICE Canada Cash Grain Close – Sep 4
By MarketsFarm
WINNIPEG, Sept. 4 (MarketsFarm) – The following are the closing
cash canola prices from ICE Futures for Wednesday, September 4.
Source: ICE Futures
CANOLA
1 Canada NCC Best Bid
Spot Price Basis Contract Change
*Par Region 427.50 -20.00 Nov 2019 up 6.29
Track Thunder Bay 456.50 10.00 Nov 2019 dn 1.00
Track Vancouver 463.50 17.00 Nov 2019 dn 1.00
All prices in Canadian dollars per metric ton.

DJ Malaysian PM Cash Market Prices for Palm Oil – September 5
The following are prices for Malaysian palm oil in the cash market at 1000 GMT Thursday, supplied by commodity broker Matthes & Porton Bhd.
Prices are quoted in U.S. dollars a metric ton, except for crude palm oil and palm kernel oil, which are in ringgit a ton. Palm kernel oil prices are in ringgit a pikul, a Malaysian measurement equivalent to 60 kilograms.
Refined, bleached and deodorized palm oil, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 532.50 0.00 Unquoted – –
Oct 535.00 0.00 Unquoted – –
Nov 537.50 0.00 Unquoted – –
Dec 537.50 0.00 Unquoted – –
Jan/Feb/Mar 557.50 0.00 Unquoted – –
RBD palm olein, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 537.50 0.00 Unquoted – –
Oct 540.00 0.00 Unquoted – –
Nov 542.50 0.00 Unquoted – –
Dec 542.50 0.00 Unquoted – –
Jan/Feb/Mar 562.50 0.00 Unquoted – –
RBD palm stearin, FOB, Malaysian ports
Offer Change Bid Change Traded
Sep 547.50 -07.50 Unquoted – –
Palm Fatty Acid Distillate, FOB Malaysian ports

Offer Change Bid Change Traded
Sep 447.50 0.00 Unquoted – –
Crude palm oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Sep 2,130 0.00 Unquoted – –
Palm kernel oil, Delivered Basis, South Malaysia
Offer Change Bid Change Traded
Sep 146.00 -04.00 Unquoted – –
($1=MYR4.1900)

DJ China Dalian Grain Futures Closing Prices, Volume – Sep 05
Soybean No. 1
Turnover: 171,664 lots, or 6.13 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 – – – 3,500 3,505 3,500 -5 0 1,112
Nov-19 3,537 3,537 3,525 3,530 3,501 3,526 25 56 502
Jan-20 3,579 3,590 3,518 3,531 3,588 3,551 -37 151,056 173,164
Mar-20 – – – 3,565 3,589 3,565 -24 0 26
May-20 3,750 3,758 3,692 3,708 3,754 3,719 -35 20,552 44,536
Jul-20 – – – 3,727 3,758 3,727 -31 0 414
Corn
Turnover: 778,706 lots, or 14.65 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 1,833 1,833 1,813 1,813 1,823 1,829 6 132 9,304
Nov-19 1,851 1,860 1,848 1,853 1,839 1,853 14 83,054 332,232
Jan-20 1,881 1,887 1,874 1,875 1,870 1,879 9 630,870 1,244,430
Mar-20 1,891 1,906 1,891 1,897 1,890 1,898 8 702 4,672
May-20 1,940 1,946 1,933 1,936 1,930 1,938 8 62,758 254,640
Jul-20 1,947 1,959 1,944 1,951 1,942 1,951 9 1,190 4,636
Soymeal
Turnover: 2,713,856 lots, or 79.46 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 3,025 3,025 2,990 2,990 3,026 3,009 -17 608 7,322
Nov-19 3,025 3,035 2,972 2,995 3,045 3,009 -36 139,352 270,394
Dec-19 3,007 3,018 2,960 2,975 3,037 2,995 -42 2,054 2,394
Jan-20 2,978 2,983 2,917 2,928 2,990 2,949 -41 2,190,274 2,255,344
Mar-20 2,900 2,900 2,849 2,867 2,911 2,885 -26 346 794
May-20 2,790 2,797 2,750 2,767 2,797 2,774 -23 380,808 735,052
Jul-20 2,785 2,793 2,750 2,768 2,793 2,771 -22 408 2,524
Aug-20 2,780 2,789 2,780 2,789 2,797 2,786 -11 6 28
Palm Oil
Turnover: 804,046 lots, or 38.73 billion yuan

Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 4,706 4,706 4,600 4,600 4,706 4,680 -26 138 9,046
Oct-19 – – – 4,754 4,754 4,754 0 0 12
Nov-19 – – – 4,790 4,790 4,790 0 0 12
Dec-19 – – – 4,742 4,768 4,742 -26 0 6
Jan-20 4,844 4,854 4,750 4,768 4,836 4,798 -38 729,422 534,230
Feb-20 4,872 4,872 4,872 4,872 4,904 4,872 -32 500 722
Mar-20 – – – 4,950 4,982 4,950 -32 0 2
Apr-20 – – – 4,956 4,988 4,956 -32 0 2
May-20 5,024 5,036 4,962 4,978 5,004 4,992 -12 73,982 100,954
Jun-20 5,020 5,020 5,018 5,018 5,048 5,018 -30 4 6
Jul-20 – – – 5,044 5,074 5,044 -30 0 1,262
Aug-20 – – – 5,094 5,094 5,094 0 0 2
Soybean Oil
Turnover: 872,442 lots, or 53.54 billion yuan
Open High Low Close Prev. Settle Ch. Vol Open
Settle Interest
Sep-19 6,032 6,032 6,022 6,022 6,032 6,030 -2 648 14,284
Nov-19 – – – 6,078 6,078 6,078 0 0 4
Dec-19 – – – 6,088 6,088 6,088 0 0 22
Jan-20 6,156 6,184 6,104 6,116 6,116 6,144 28 770,138 945,504
Mar-20 6,186 6,186 6,150 6,160 6,112 6,154 42 442 520
May-20 6,082 6,106 6,040 6,048 6,054 6,074 20 101,212 208,368
Jul-20 6,128 6,128 6,128 6,128 6,122 6,128 6 2 1,424
Aug-20 – – – 6,262 6,256 6,262 6 0 0
Notes:
1) Unit is Chinese yuan a metric ton;
2) Ch. is day’s settlement minus previous settlement;
3) Volume and open interest are in lots;
4) One lot is equivalent to 10 metric tons.

DJ Ethanol Industry Reels as Trade Dispute and Policy Changes Cut Demand
By Jacob Bunge and Kirk Maltais
The ethanol industry is suffering from weaker prices and oversupply as that pillar of the farm economy has been hurt by regulatory changes and the trade dispute with China.
Producers of the corn-based fuel additive, including Green Plains Inc. and Poet LLC, have closed plants over the past year in Indiana, Iowa, Minnesota and other states. Companies such as the grain giant Archer Daniels Midland Co. are scaling back their ethanol business.
“This is probably the worst downturn we’ve seen in the industry’s history,” said Geoff Cooper, chief executive of the Renewable Fuels Association, a trade group for biofuel makers.
Ethanol is a celebrated cause in rural America, where roadside signs hail corn farmers’ role in helping the U.S. wean itself from foreign oil. The federal mandate for oil refiners to blend ethanol into gasoline, established in 2005, helped turn the ethanol sector into a $28 billion industry and created a major new source of demand for crops. About 38% of corn grown in the U.S. is used to make ethanol, according to the Agriculture Department.
Demand this year has been hurt in part by regulatory exemptions for U.S. oil refiners to blend ethanol into gasoline. The ethanol industry says such exemptions unfairly benefit oil companies at its expense. The Environmental Protection Agency said it weighs refiners’ requests against regulatory requirements.
Also hurting the industry is the trade dispute. China has halted ethanol imports from the U.S. that last year totaled 53.9 million gallons. That is less than 1% of U.S. output, but China was the fastest-growing foreign market for U.S. ethanol, according to the Renewable Fuels Association.
The combination of factors has led to increased supplies of ethanol, lower prices for the biofuel and higher losses for producers, according to people in the industry. The resulting plant closures are leading to job losses and reducing corn demand in rural areas where President Trump has drawn strong support.
In Cloverdale, Ind., farmer Kim Ames sells about three-quarters of his corn crop to a nearby Poet ethanol plant. After Poet said last month that it plans to close the plant, Mr. Ames said he would have to sell his grain to poultry producers in the Southeast, who tend to pay less. Ethanol plants can pay higher rates than animal-feed makers because they typically need a guaranteed supply to fulfill supply contracts with gasoline makers and maximize efficiency.
“Ethanol was good for me, it was good for this community,” Mr. Ames said.
Ethanol futures fell during most of this summer. Since rising in June, ethanol traded on the New York Mercantile Exchange has dropped 21% to $1.35 a gallon. Prices for corn, the main ingredient in ethanol, have fallen 21% in that time.
A survey conducted in August by the trade publication Farm Journal after the EPA granted waivers to 31 refiners to reduce their ethanol use found 71% of 1,153 farmers polled approved of Mr. Trump’s performance, down from 79% in July.
Green Plains’ Chief Executive Todd Becker, who introduced Mr. Trump at an Iowa campaign event in early 2016, said the farmer vote was the president’s to lose. “They’re not voting for someone else, but they do have to show up and vote for Trump,” he said in an interview.
American Farm Bureau Federation President Zippy Duvall said he urged Agriculture Secretary Sonny Perdue to address the ethanol industry’s struggles in August.
“It’s our job to remind the administration of the risks, and how important it is,” Mr. Duvall said.
An EPA spokesman said ethanol production and exports have grown during the Trump administration to a record high in 2018. The administration in May allowed the year-round sale of gasoline with a higher ethanol mix, aiming to boost ethanol producers and the farmers who supply them. President Trump said on Twitter last week that he would do more to help the ethanol industry, while also aiding oil refiners.
“It will be a giant package, get ready!” he said.
Brazil said Monday that it would increase its ethanol import quota to 750 million gallons, up from 600 million. The move is expected mostly to benefit U.S. ethanol producers, although groups such as the U.S. Grains Council criticized Mr. Trump for not securing a deal to eliminate the quota.
U.S. ethanol consumption declined last year for the first time in over two decades. Ethanol producers have on average lost money on every gallon produced since July 2018, according to estimates from Iowa State University. Four plants have halted operations since May. In addition to saying it would close the Cloverdale plant, South Dakota-based Poet reduced production at 14 other plants, while laying off workers.
ADM’s bioproducts division, which includes ethanol, lost $100 million over the first six months of 2019. The Chicago company plans to separate some of its ethanol-producing mills into a stand-alone business that it could sell or spin off.
Omaha, Neb.-based Green Plains last year closed a plant in Virginia and sold three others to Valero Energy Corp. In August, Green Plains reported a $45 million loss in its latest quarter, estimating that the company lost 24 cents on every gallon of ethanol produced during the period.
Near Maricopa, Ariz., where Pinal Energy LLC idled its 50-million-gallon-a-year plant in February, livestock producers once fed leftover grain from ethanol production to their animals. Now they are hunting for pricier alternatives, said Eric Wilkey, president of Arizona Grain Inc., a sister company to Pinal.
“There’s a cost of not having a local supply,” he said.
Write to Jacob Bunge at jacob.bunge@wsj.com and Kirk Maltais at Kirk.Maltais@wsj.com

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