Topic: Gasoline/Ethanol Price Spread down to 18 cents

[cessna]

Not sure what the reason but E10 is priced 13 cents less than E0 here in town at the Casey's. Usually it is just a dime.

[cessna]

this stressed corn will be toxic with nitrates

I was told the dairies over here are windrowing the corn and letting it lay for awhile. Then they are chopping it to alleviate the toxicity.

[1outlaw]

Biggest issue for dairy and beef producers around here is not going to be corn- not even close. # 1 issue that is going to hurt cattlemen will be forage to keep the ribs apart- corn will not help that unless they take it for corn silage (which they are trying to do but nitrates in this stressed corn will be toxic with nitrates). I care about cattlemen- I could give a rat about big pig and big chicken with the likes of Tyson and other integrators. I am even more concerned about quanity and quality of this years vegetable crops--it just is not out there. Semi-loads of green beans, sweet corn, peas,  and carrots should be rolling thru my town 2-4 minutes apart 24 hours/day. I have seen two trucks- the 106 degree temps ruined even the irrigated crops. It is too early to know about potatoes.

[Dan M]

Well Minnesota Corn looks good..we've had a pretty decent weather other than 1
2 week dry spell..  I know rain has been falling and more coming to Iowa , Wisc, Illinois ..so while the corn that's already lost..is lost ..maybe the damage can be tempered with these rains .


Yep nitrogen fertilizer going to be expensive cessa..


You just now that after 3 years of NG over production that that will be next going higher as they slow production

[cessna]

Something else that is going to be interesting to see-----natural gas prices are still very cheap but will anhydrous ammonia for nitrogen fertilizer go even higher since we farmers can lock in high corn prices for next year.

[Dan M]

Note: As of Friday's close, ethanol is now officially MORE EXPENSIVE than gasoline. 

 I looked at October futures prices, where ethanol, on Friday afternoon trading, topped $2.69 a gallon, yet gasoline is just $2.65.   

So, we have an inverse value period relative to gasoline ahead.

CORN is now screaming at $8.20 a bushel, and ethanol has climbed in price every day. 

This has to be devastating for ethanol producers.

James.. this is what I have been saying.. I just want us all to realize it isn't just ethnaol Producers..it is Cattle, Hogs, Poultry, Dairy.. (as well as ethanol producers)the RIGHT thing to do is during periods of drought/ floods.. anything that pushes corn beyond some "limit" then we the RFS Mandate for CORN ethanol should be lowered..automatically if necessary..to take pressure off corn prices..


again no engine is going to do that.. what will accomplish this is simply lower the additive amount of E10 to.. E9, E8, E7  roughly 1.2 billion gallons for each point


Yes we need a ethanol optimized engine..that's along term plan.... we need FAST short term solutions for when feedstock prices get to high to keep ethanol competitive..as well as being a good "neighbor" to our livestock producers..


The ONLY people that you will hear bitching is the corn lobby.. every  other Industry(as well as consumers)  would WELCOME some common sense relief from the high corn prices

[cessna]

This has to be devastating for ethanol producers.

The perfect storm----I can see the end of the RFS and maybe Big Oil owning the ethanol plants eventually.

[James48843]

Note: As of Friday's close, ethanol is now officially MORE EXPENSIVE than gasoline. 

 I looked at October futures prices, where ethanol, on Friday afternoon trading, topped $2.69 a gallon, yet gasoline is just $2.65.   

So, we have an inverse value period relative to gasoline ahead.

CORN is now screaming at $8.20 a bushel, and ethanol has climbed in price every day. 

This has to be devastating for ethanol producers.

[Corey872]

That is the thorn which sticks in my side...there are CNG / and propane engines out there.  I don't know where I'd find a CNG fill....might be able to hit a rare filling point for propane, but I wouldn't take a long trip without serious research and planning.  Electric vehicles...well ya, I can charge in my garage, but then what??  Stop alongside the road for 8 hours every 50 miles?  Several vehicles barely make 10K production vehicles in a year..."Smart" car?  Honda Insight was 7-8K/yr tops, Plymouth Prowler?  Honda Civic GX?

So alternate fuel engines CAN be made, cars CAN be produced in low numbers...and with fuels much more different and harder to find compared to gasoline than ethanol is.  An ethanol engine CAN still run on gas, though you would probably loose 20% power vs the mileage loss which comes running a gas engine on ethanol.

So where are the blasted things?  It's a chicken and egg scenario to be sure, but we have what a couple hundred NG fueling stations...and production NG cars on the road.  We have almost 2300 E85 stations and no production E85 vehicle?

Though really, I would not be surprised to see NG exploding in the coming years.  All this fracking and oil shale exploration is producing natural gas in huge volumes.  At what environmental cost...nobody knows.  People will whine about putting a little water on a corn field and watching it evaporate to form clouds.  But mix it in a toxic chemical slurry and inject in underground near the water supply...perfectly fine!

[HuskerFlex]

Just thought of something. Ethanol and propane are both very high octane rating and that would be a good  combination for duel fuel.

yes that would be a great starting point...  just read about a bunch of states that are petitioning Detroit to make more CNG vehicles for them to purchase en-mass for fleet purchases...

Propane/CNG and e85 all are best when optimized with high compression.

[Jonny Energy]

Ouch   I thought only the weak Oil companies and dime a dozen politicians wanted me gone. Now you too.  J/K  Although its a bit of a struggle as of late. 

...
Engine Design/optimization, tooling ..you're talking a billion or more.. that does nothing NOW.....

(besides what you want would but Johnny Energy out of business  )

Nothing personal, but I call BULLSH@#^!    It would not take a billion dollars to make a viable ethanol engine.  Ricardo has done it, I've come fairly close and could make substantial improvements based on knowledge learned from this last go-round.  If manufacturers can make 15 different engine configurations for their product line, adding one more isn't that big of a deal.

True, it may do nothing 'NOW' but in typical government fashion, the 'good years' have been squandered...sucking up tax money, relying on cheap corn, bumper crops, etc, now a few bad years come down the pipe and suddenly it's a 'crisis'. 

Yes, I'm sorry to put Johnny out of business.  My great grandfather had a tough time when the economy shifted from whale oil to petroleum, my grandfather lost his job delivering ice door to door when refrigeration came along, my dad went out of business when it became cheaper to buy a new TV as opposed to have one repaired.  But they were all able to adapt.  So I would say, never settle for status quo...not moving forward means moving backward...keep an eye out for the next big thing, etc! 

[cessna]

Just thought of something. Ethanol and propane are both very high octane rating and that would be a good  combination for duel fuel. I remember the propane dealer here had a Ford Fairmont that was powered by propane---not sure but I think it was factory.

[cessna]

While I've never owned one, John Deere and other tractor mfg's modified their gas engines with higher compression pistons when they were propane fueled.

[HuskerFlex]

"optional engine"...  I remember the days when you could custom order various features in cars... I rember my dad going to a dealer ship looking at various vehicles, sitting down with a catalog, and picking out the features he wanted... paid a bit more, but got the package he needed.

Waited a month or two... (can't remember, as I was young) an got just what he wanted.  People were always amazed as they'd never seen a car like that... but they did it.

Would be great if Detroit would do this with ethanol.

[rusty70f100]

I'm going to agree with Corey here.  It would not take anywhere close to $1 billion to make an ethanol optimized engine.  Really all they'd have to do, and this is simplified a bit, is take one of their gas motors, install taller pistons, and tweak the computer programming a bit.  That's it.  Now in an ideal world they'd rework the combustion chamber and piston top for a more efficient burn, but a simple raise of the compression ratio would get them 90% of the way there.

Market?  That's simple.  It wouldn't be in everything.  It would be an optional motor, maybe with a small price premium for that option.  The people / dealers who order it would have to be smart enough to have ready access to E85 pumps already.  Then, they could get their mileage and have more power available than those burning gas.

And when you think about it, they wouldn't even need the fuel composition sensor (virtual or otherwise), would they?  That would save some of the cost.  Just set it up so if it starts pinging too much, or goes too rich, it sets off a light on the dash.

A long time ago they used to sell high compression engines that required high octane fuel... why not now?

[Dan M]

...
Engine Design/optimization, tooling ..you're talking a billion or more.. that does nothing NOW.....

(besides what you want would but Johnny Energy out of business  )

Nothing personal, but I call BULLSH@#^!    It would not take a billion dollars to make a viable ethanol engine.  Ricardo has done it, I've come fairly close and could make substantial improvements based on knowledge learned from this last go-round.  If manufacturers can make 15 different engine configurations for their product line, adding one more isn't that big of a deal.

True, it may do nothing 'NOW' but in typical government fashion, the 'good years' have been squandered...sucking up tax money, relying on cheap corn, bumper crops, etc, now a few bad years come down the pipe and suddenly it's a 'crisis'. 

Yes, I'm sorry to put Johnny out of business.  My great grandfather had a tough time when the economy shifted from whale oil to petroleum, my grandfather lost his job delivering ice door to door when refrigeration came along, my dad went out of business when it became cheaper to buy a new TV as opposed to have one repaired.  But they were all able to adapt.  So I would say, never settle for status quo...not moving forward means moving backward...keep an eye out for the next big thing, etc! 

Morning Corey.. my point is a ethanol engine is a mute point because there isn't enough high blend volume to make it viable....GM, Ford , Chrysler etc.. they are NOT going to spend 1 dime ..or a billion when 99% of ethanol production is going to use as an additive E10 instead of as a alternative fuel ..E85


SOooooo.. the only way for E85 drivers to get a FAIR price spread against Gasoline is to do what we can to make sure that corn prices are reasonable is to lobby against E10/E15 UNTIL there are more feedstocks whether it be switchgrass, beets, sugar cane and or trash to ethanol... we  are in a MAJOR drought and corn prices are surging ..there is NO logical reason why we need to produce 13 billion gallons of E10..we can lower the price of corn and ethanol to a reasonable level simply by only allowing E8,E7 or E6 during times when corn prices are stressed due to extreme weather conditions ...


I don't care about E10, I don't care about the corn lobby ..I DO care about people that want to drive on Alternative fuels Like E85 , I do care that we shouldn't be driving up the price of corn (via E10 additive blends) hurting other Industries, Hog , Cattle, Poultry , Dairy in the process..


Ethanol specific engine ..FANTASTIC Idea..but until we get the Industry producing ethanol as an Alternative Fuel instead of a additive fuel ..it isn't going to happen.




Which leads me to this thought Corey.. you know we should keep closer track of what the Auto Industry is doing in Brazil more closely ..you'd think we should see the first signs of the Auto Industry experimenting/ production models with Ethanol specific /tuned engines their considering you can buy E100 at just about any Station in Brazil

[Corey872]

...
Engine Design/optimization, tooling ..you're talking a billion or more.. that does nothing NOW.....

(besides what you want would but Johnny Energy out of business  )

Nothing personal, but I call BULLSH@#^!    It would not take a billion dollars to make a viable ethanol engine.  Ricardo has done it, I've come fairly close and could make substantial improvements based on knowledge learned from this last go-round.  If manufacturers can make 15 different engine configurations for their product line, adding one more isn't that big of a deal.

True, it may do nothing 'NOW' but in typical government fashion, the 'good years' have been squandered...sucking up tax money, relying on cheap corn, bumper crops, etc, now a few bad years come down the pipe and suddenly it's a 'crisis'. 

Yes, I'm sorry to put Johnny out of business.  My great grandfather had a tough time when the economy shifted from whale oil to petroleum, my grandfather lost his job delivering ice door to door when refrigeration came along, my dad went out of business when it became cheaper to buy a new TV as opposed to have one repaired.  But they were all able to adapt.  So I would say, never settle for status quo...not moving forward means moving backward...keep an eye out for the next big thing, etc! 

[HuskerFlex]

just visited with my brother who is a corn farmer and raises cattle... said most pasture is done for in central nebraska... those with Brome hay... have no chance....  the more drought tollerent natives hays have old brown regrowth from last year for cattle to eat.  He usually has brome hay that he puts up to get the cows through the winter... not this year.

With such a wide spread drought... there are simply too many people also looking to buy hay to fill in for what they can't produce themselves.  VERY few, if any have any surplus hay.

No hay to be had, even if you had the money to buy it.

[Dan M]

At the risk of sounding like a broken record, we need better engines, not cheaper fuel.  All this E5, E7, E8, E10, E15, E35, E50, E85 stuff is pretty chaotic, too.  No way to optimize an engine for that.  We need one fuel with reliable specifications.

Engine Design/optimization, tooling ..you're talking a billion or more

To Corey....Amen,

To Dan, the parts are here NOW!!! There is no retooling need just a change in the part numbers put into the bill of materials for the build sheet the manufacturers use to build the vehicle.

The point is they are NOT going to do it..why would they ?  Why on earth would they  when there are only 3,000 stations selling high blend ethanol..  It's ALL about Volume.. I wouldnt expect to see an high blend ethanol optimized engine until at least 30,0000 + Stations are selling E85


99% of all Ethanol is used for E10..99%


1% (actually less than 1% is being used for E85..a few hundred million gallons..there is not a chance in you know what they are going to spend 1 dime building a ethanol optimized engine




Back on topic ..there is a major drought..major ..I would not be surprised at all to see corn going to $10 .. that means Cattle , Hog, Poultry , Dairy producers are going to be suffering ..big losses, bankruptcies etc.. as well as ethanol producers and it will mean E85 will be MORE expensive than Gasoline..


The Easiest and fastest way to lower corn prices is to stop making so damn much corn ethanol ..as it is 99% just being used as an additive ...E10..


They can stop are temper the coming disaster simply by lowering E10 to E8, E7....

[1outlaw]

Just think of the money some ethanol plants might be making right now. I don't know anything for sure but the middle of June is when the corn market bottomed out in recent history. If some savvy plants bought a lot of corn on the CBOT and are riding it up, things might be great at these prices. I guess distillers grain is very high since it is in big demand also.

While that is possible that a few are taking those kind of risks- I am doubtful. 2008 pretty much changed the landscape to back to back trades, meaning E-plant contracted your corn last May for July delivery and then on the same day E-plant certainly locked in the ethanol and most likely tried to lock the distillers too. The distillers would be the most likely unhedged.