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vrbuck
Advisor

weekly ethanol stocks

shoot up 48 million gallons to 880 million gallons last week. highest since last may 27.  poor gasolene demand.

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11 Replies
Pupdaddy
Advisor

Re: weekly ethanol stocks

Gas is still above $3.25 a gallon here. With all the excess inventory, you'd think it would drop to at least below the $3.00 mark. Nothing like a market that ignores Economics 101.

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GoredHusker
Senior Contributor

Re: weekly ethanol stocks

From what I've read, it's not poor gasoline demand that has caused ethanol stocks to rise.  Rather, it's ethanol exports have fallen off a cliff the past three weeks. 

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vrbuck
Advisor

Re: weekly ethanol stocks

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPOOXE_YOP_NUS_MBBLD&f=W production has dropped off the highs but still is within a range. Guess they are just stockpiling it.
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vrbuck
Advisor

Re: weekly ethanol stocks

As of 12-23 ethanol stocks where 17,674,000 we are currently at 20,945,000 as of 1-27-12 in ethanol stocks.  We arent using or exporting near as much lately.  I wonder who warned about this before the fact?  Wonder who said brazil lowered the ethanol mandate because they couldn't keep up with demand?

 

 

 

http://www.eia.gov/dnav/pet/PET_SUM_SNDW_DCUS_NUS_W.htm
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GoredHusker
Senior Contributor

Re: weekly ethanol stocks

If I read the EIA report correctly, we now are sitting on the largest stockpile of ethanol since they've been keeping records.  What makes this situation even worse is the fact that there are some states that only have ethanol requirements in the winter months like Colorado.  We're getting closer and closer to spring and summer when ethanol stocks typically grow. 

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vrbuck
Advisor

Re: weekly ethanol stocks

So exports and insections are slow, unlike what some farmer rags have been telling clients.  And Ethanol demand as slowed which we clearly show.  Who wants to use corn like some super bulls have been saying.  We have been told big demand, big demand, but the numbers don't show it.  At what price does real demand pick up.

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mid-west
Frequent Contributor

Re: weekly ethanol stocks

So, are the E-plants open/spec on the ethanol stockpile or do they have it hedged? My point is, is there a reason for them to slow production?
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rayjenkins
Veteran Advisor

Re: weekly ethanol stocks

It's tough to make general statements about the dry mill ethanol biz.....but the opportunity for respectable margins in the first quarter of 2012 existed when it was apparent the VEETEC was going away...

 

so I suspect the plants have locked in margins into at least March......after that, the opportunities to capture margins were fewer and farther between.....so my guess is that any big changes occur in spring/summer if plants are running in the red....

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GoredHusker
Senior Contributor

Re: weekly ethanol stocks

Exports and inspections aren't slow.  They're running ahead of where they need to be running to get where USDA has pegged.  However, I really don't think this is the issue.  Exports make up a fraction of what ethanol does with regards to demand.  Feed and ethanol are by far the two largest users of corn.  Disruptions in either will make a far larger dent in ending stocks than exports. 

 

The trading range I've read that we're stuck in is 5.80 to 6.80.  With huge acres expected to come on line, many analysts don't think new crop corn can muster much above 6 without severe weather this spring.  I think the biggest thing that holds corn prices back in the next few months is soybean prices.  With SA getting much improved weather and rains, we might be nearing a top in the beans.  Marketing would be a lot easier if we knew what Helicopter Ben was going to do.  I see where some analysts that were once calling for a big rally in the dollar in 2012 have backtracked now.  I wouldn't be shocked to see the dollar trade between 78 and 82 most of the year.  Not low enough to cause massive funds into commodities, but high enough to curb any exports or cause oil to retreat significantly. 

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