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teaspoon73
Senior Contributor

Re: updated shipments, cotton, $7 corn, $13 Soya, acres....MARCH 5th......wow....

  Gored, you have the wrong perception of running an ethanol plant. They are not made to dial down to run at 50%, unless you have two plants setting side by side. If you slow it down to 80% the next step is shut down. You don't want to shut down a plant when its freezing. Many plants are shut down now because of banking issues. Pacific Ethanol, a plant in Georgia one in New York, Aventine has issues, that's a half billion gal. Everyone is different. When someone forward contracts corn you want to honor that contract and build yours sales around it. All corn in house on the last day of the month is valued at market price on the balance sheet. So corn price on the last trading day is important. Plants are built to take in corn, not resale the corn already there. Most would need a different license from the state they are in  (elevator) . As far as tank space, that can be a challenge . Some plants are actually storing it for a better price. Remember 7 petroleum refineries have shut down in the last 3 months. There is a billion gallons of tank space right there. Some plants have the capacity to buy and store a lot of grain at harvest, or offer attractive carries to get people to forward market the corn on there farm. So when vrbuck is screaming for the market to go lower in Dec. and you know that 820 million carryout doesn't warrant it. You want to gather in all the forward contracts or physical corn you can carry. A lot of plants hedged ethanol the first of Dec into March.  Gas is not getting cheaper. Ask your local filling station for E-15. That will be the only way gas gets cheaper.

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rayjenkins
Veteran Advisor

Re: updated shipments, cotton, $7 corn, $13 Soya, acres....MARCH 5th......wow....

I'm not sure that going to E-15 in the current environment decreases the cost of gasoline.....For arguments sake, let's say that ethanol right now is 75 cents cheaper than RBOB.....and that if we waved the E-15 magic wand, the spread goes from 75 to 25......that is good for the ethanol producer, but actually decreases the total profit for the petro/blender group, who is maximizing their profits today by having the ethanol industry in a breakeven to small negative margin situation....

 

need to remember that if demand for RBOB goes down (due to higher ethanol consumption), then more refineries shut down, and we'll see more logistical disruptions  in RBOB supply.....

 

it's not necessarily a "virtuous cycle"......in fact, it could easily be the opposite....

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rayjenkins
Veteran Advisor

Article on refinery closings...and another with listing of US refineries

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roarintiger1
Honored Advisor

Re: updated shipments, cotton, $7 corn, $13 Soya, acres....MARCH 5th......wow....

teaspoon73,  Thanks for that post.....it was a good explanation.

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Brianfo
Frequent Contributor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

I caught that but nobody else did.

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vrbuck
Advisor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

Doug if you use the other posters method you are, taking shipments year to date and then compairing them to last years shipments.  Since we had a short crop last year the importer back loaded shipments before "the world ran out of corn".  He is "betting on the come"  that this years shipping pace matches last years blistering last half pace in order to catch up on his expected targets.  If the pace picks up, to catch up with wasde's numbers the weekly reports will show it.  Building your number based as a wing and a prayer or betting on the come is so dangerous to do.  What if we have the mother of all crops this year.  The importers will turn into hand to mouth buyers intead of load up the boat buyers last year.  So far the running total is behind.

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vrbuck
Advisor

Re: updated shipments, cotton, $7 corn, $13 Soya, acres....MARCH 5th......wow....

Actually Teaspoon I was saying sell in the first week in Jan.  I have people tha will verify it.  The fact I was pointing out the weekness in the ethanol chain is more of a fundemental factor.  Unfortunately sometimes fundementals are ignored unill it is to late.  Sometimes it take a few months for price to follow fundementals.

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Brianfo
Frequent Contributor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

Man. You two need to get a room. Just to be on record, Buck, I am on your side. There is a lot of wiffs out there. Sad that American farmers are always bullish. And I mean always bulliish. Nothing wrong with that.

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Mizzou_Tiger
Senior Advisor

There it is again the...........

mother of all crops................yet you couldn't find the margin money to take the 164 or 14 challange............

 

funny how that works............

 

its also funny how you use the term "wing and a prayer" to discount a bullish scenerio...........yet use the term "what if" in the very next sentence to validate a bearish argument.............

 

o and you didnt answer the question in this post either............why isnt corn at $3 or $4.............HMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM......................................................I took the heat in the kitchen when everyone wanted to wash this thing down the drain, and now corn has put on a buck and soya 2..........................................................................I AM SO TIRED OF THESE PHONY BEARS...............GO HOME ALREADY.............YOU HAVE BEEN WRONG SINCE AUGUST 2010...............

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vrbuck
Advisor

Re: updated shipments, cotton, $7 corn, $13 soya, acres......MARCH 5th......wow....

careful you may be accused of being me again.

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