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NCcorntrader
Senior Contributor

Stock/Use ratio

this came up in another post, and since it is obvious I love numbers, here is the plot with a twist- assume ethanol goes to zero in one plot and look what happens

stocks use ratio.jpg

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8 Replies
jrsiajdranch
Veteran Advisor

Re: Stock/Use ratio

Yea but here in litteralville we are not going to have a year with no ethol. It is here and it is gonna stay. IF there is no increase in the mandate we have pretty much maxed out the total supply it is gonna need.

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NCcorntrader
Senior Contributor

Re: Stock/Use ratio

jr

 

i agree it is not going anywhere. just thought it was an interesting perspective. we are capable of growing an insane amount of food in this country.

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sonoma72
Veteran Contributor

Re: Stock/Use ratio

I am offically addicted to these charts.  That is a very sobering chart in that we all know where prices would be w/o ethanol, a small hint of what is possible if sen. coburn is successful. 

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hardnox604008
Advisor

Re: Stock/Use ratio

Of course some of the production was brought out as a response to price from ethanol demand. Without ethanol demand there would have been less supply. Now we really are 100% dependent on the politicians as production and costs repond.

 

 

In retrospect, a mandate of around 9.6 b/g/y that met the original Clean Air Act requirements, coupled with some way to push e-85 demand when operating economics favor it vs. gasoline would have been much better public policy. And still huge for crop agriculture, I might add.

 

The real risk to ethanol is that the lobbyists are too good- or the politics are too easy- which could still result in a massive global food crisis and severe political backlash.

 

 Hope for good weather.

 

Some times just 'cause you can get it doesn't mean it is a good thing.

 

 

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rebelicious
Friend

Re: Stock/Use ratio

it wouldn't be maxed out if everyone with flexfuel vehicles would buy the E85,especially a farmer

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muddymiller
Frequent Contributor

Re: Stock/Use ratio

Please post charts showing what would happen to gas prices if 10% of our fuel went away, or unemployment numbers for the Quad Cities or anywhere for that matter. You're assuming we would still plant corn fence row to fence row.
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hardnox604008
Advisor

Re: Stock/Use ratio

On a net energy basis it is maybe 1%.

 

So the idea that you will take other forms of energy (some is oil, some is ammonia, NG) and turn it into a liquid fuel for transport and thus save the day is pretty silly. You can burn NG in vehicles more efficiently- you can actually burn NH3 in vehicles more efficiently with a catalyst- it is a very good hydrogen carrier.

 

Corn works very well for home heating without running it through the Rube Goldberg machine and is likewise, more efficient. Propane and heat oil that is displaced can be burned in vehicles.

 

The energy argument doesn't cut it. The oxygenation argument is bullet proof and all you ever needed if you hadn't let the talking point boys take over.

 

As to employment, sure, workers at Deere are also now officially dependent on government policy. But one of the problems with this corn ethanol program is that it didn't know what it really wanted to be but could be anything as required- environmental, energy security, rural ecomic development.

 

Such is the nature of using government policy to redistribute income in insidious ways.

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NCcorntrader
Senior Contributor

Re: Stock/Use ratio

muddy

 

dont take me to literally here- i am just trying to show how corn nas become an energy trade rather than a food trade, which I think is what hardnox is trying to say as well

 

here is the price of corn vs gasoline with a scaling factor (a constant that has no effect on the lines relative to each other)

 

i know its hard to see but this tells me one of two things- gas will go up to meet corn as it did in 2008 (unlikely in my view) or corn will go down to meet gasoline

 

corn vs gas.jpg

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