Marketing

[vrbuck]

the production number s are slowly coming down from the lofty number of last dec before the tax credits expired.  We are currently at the production pace of last november and slipping.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_YOP_NUS_MBBLD&f=W

[vrbuck]

ethanol stocks keeps balooning.  where are they going to store all this unwanted ethanol.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_SAE_NUS_MBBL&f=W

[roarintiger1]

It will be ok.  If and when the ethanol plants start cutting back on mashing corn,  there will be hundreds of thousands of tons less of the DDGs to go on the market......meaning the livestock will be eating more actual corn and less DDGs.  Corn usage for ethanol goes down, corn usage for feed goes up.  Plus, the wheat is damaged in eastern Europe so we won't be feeding quite as much wheat in the world either.

[unlgrad]

If we stayed at that number, what corn would be left for ending stocks? 5.1 billion is all that is alloted in S&D for ethanol, I can't see how we could stay on the pace we are at and keep carry over adequate.

[GoredHusker]

DDG's make up roughly 1/3 of the same bushel of corn going into ethanol.  If a 15 million bushel plant shuts down, a net loss of 10 million is the result because only 5 million bushels of corn will be fed taking the place of the distillers.  From what I've read ADM shut down a plant just this week.  I've been notified that a local ethanol plant will grind until the 16th, then it will be shutting down.  If I had a lot of unpriced corn, I'd definitely be getting a basis contract because it only takes one ethanol plant locally shutting down selling their contracted corn back onto the open market to really upset the apple cart in terms of basis.  

Considering USDA just raised World carryouts on wheat, I'm not real sure how anyone could logically come to the conclusion that we will be feeding less wheat in the World.  

[DW11]

Buck,

I looked at your link.  It clearly shows that we are still in the typical seasonsl pattern for ethanol production which slows after Jan. 1st.  This is nothing new.  

Compare the average of November 2010 production which was 887,000 barrels to the first week in February 2011 which was 900,000 barrels.  Then compare the average of November 2011 production which was 918, 500 barrels to the first week in February 2012, which was 923,000 barrels.  Slight increases in both cases.  There could be trouble ahead in ethanol production margins but your link does not show it yet.  

[GoredHusker]

Carryouts of 20+ million barrels of ethanol is anything but typical.  We're to a point in ethanol carryouts where finding room for additional product probably isn't there.  It wouldn't matter how profitable an ethanol plant is right now, they're going to have to slow grind speed because they can't get rid of their product.  They can't fill on site storage with product that is already completely full.  I read yesterday where gasoline demand domestically is the worst in the past decade.  I think one must ask themselves before casting any votes if this is because we're driving more fuel efficient vehicles or if this is because the economy is not getting better?   

[vrbuck]

They can tweak unemployment numbers to death but if noone is buying gas it is telling the true story.  I don't want to say that too loud because we are gonna listen to people wanting another QE3 into ablivion (which doesn't work BTW).

[GoredHusker]

QE3 is going to be a tough sale now.  The economic numbers are being tweaked.  This is nothing new in an election year.  However, it's a tough pill to swallow that the unemployment number is down to 8.3 percent when they show the American work force is the smallest since 1986.  Unfortuantely, the population of the U.S. is quite a bit larger than it was in 1986.  QE3 will be tough to sell considering the numbers are being tweaked and QE3 is politically unfavorable.  I still wouldn't be totally shocked if the powers that be don't find a way to break the crude oil market just in time for election.  This would be a double edged sword for the ethanol market.