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junior359
Contributor

ethanol stocks burdensome??????

vrbuck keeps sayin we got way to much ethanol and plants are just goona stop grinding but reading some news this morning has me wondering if those in the know weren't stocking up and getting ahead of the game with a purpose.  If this iran thing blows-up and looks more likely everyday wouldn't all that cheap extra ethanol they got stored-up suddenly become priceless?? have heard and read in no less than four different stories this morning that 4-5 dollar gas is coming soon. That always seems to be a self-fullfilling prophecy. So they've got a ton of it ready to sell at much higher prices and may still be able to turn a profit with 8 dollar corn. Maybe it was someones plan to fill up the storage, shut down for maintenence then go balls-to the wall again.

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12 Replies
vrbuck
Advisor

Re: ethanol stocks burdensome??????

The plan was to grind balls to the wall to get the 45 cent blenders credit.  They didn't see the brazilians lowering their mandate, or the decline in the gasoline consumption of the American driver.  Right now the ethanol plants are getting to the point where they physically can't keep storing ethanol. 

 

 

BTW look out for a bearish surprise at the outlook conference  at the end of the week, I have cycle timing then.  Ken should know what I am talking about.

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marketeye
Veteran Advisor

Re: ethanol stocks burdensome??????

I'm told that the market thinks the ethanol industry is now in a much more volatile environment. In other words, on one hand, it will now take even stronger margins to get the plants that have slowed or shutdown back up and running. And, on the other side of the spectrum, it will take a lot worse conditions to slow the plants down. All of this as a result of the blending credit vanishing. Do you think this is the case, based upon the crystal ball you are looking through?

 

FWIW

 

Mike

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junior359
Contributor

Re: ethanol stocks burdensome??????

MIke, you confused me on that can you explain in simple terms? you said on one hand will takelot better mrgins to get going and on other hand lot worse conditions to slow them down .lost me.

just looks to me like iran could be the start of "the perfect storm" for ethanol

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rightone
Senior Contributor

Re: USA produced 80+% of it's

own crude oil / o & g useage in 2011.

 

Drilling is busy in the usa.  Really BUSY.

Record high rig counts, drilling big volume production acreage in several areas of the usa ( especially in the West ).

 

That 80% of useage internal oil produced is a new recent high. 

 

Old high was in the early 1990's @ 70% range of oil produced to internal useage.

 

The usa is thus not truely importing much oil.

Keep in mind, if the usa were to keep idling back on foreign military operations, oil useage keeps dropping a bunch too.

 

Oil produced to useage in 011 numbers perhaps have some to do with pulling out of iraq.

 

It is remotely possible the usa will be a net oil exporter in 012.

Demand function for gas in the usa has been trend lower annually of late.

 

In 2013 net oil exports from the usa are likely a "given" so to speak.

 

The afore may or may not have any impact on e.

Just don't know.

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rusureofit
Frequent Contributor

Re: USA produced 80+% of it's

Thought this was interesting:

 

"For anyone bummed out about the United  States' dependence on foreign oil, try this forecast on for size: The U.S.  is on track to be a net exporter of petroleum products this year for the first  time in 62 years"

 

Full article here:

http://www.foxnews.com/us/2011/12/05/us-on-pace-to-become-net-fuel-exporter/

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vrbuck
Advisor

Re: ethanol stocks burdensome??????

Goes back to a function of profitability.  The least cost producers are more then likely to survive.  I do wonder where all the ethanol is gonna be stored.

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teaspoon73
Senior Contributor

Re: ethanol stocks burdensome??????

  The question you should be asking is with all this extra oil around WHY are you paying higher gas prices everyday????????       You can buy crude oil $30 a barrel cheaper in N.Dak than the WTI price. Why is the American consumer paying 50 cents per gallon more for gas than they were in the last two weeks of December????  Looks like ethanol can be produced cheaper  than gas! 

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DKIL
Frequent Contributor

Re: ethanol stocks burdensome??????

That is easy to answer.  We don't use crude oil in our cars. We have not kept up with refinery capacity. 

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k-289
Senior Advisor

Re: ethanol stocks burdensome??????

With all of  BIG  oil's profits they can't build a refinery ???  They have "moth balled" refinery's setting all over the country--- a local inverstor group builds an  ethanol plant in 18 months and big oil can't only using the  EPA excuse and still ""refined products exported"" increase to the International markets from us ---try using a differnt logic and I will keep using " E-85" --- Sorry USA consumor you have been thrown under the bus from a business base in this country that was built with  "your" hard earned  $$$ ---   

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