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dan45mcc

Corn and Ethanol Prices Surge

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Too funny ..so the "reason" they are pushing corn higher is supposedly because of the late planting this year due to late snows and rains and soggy fields.. just too damn funny..

 

 

They could have just as easily dropped the prices for the same reasons... the headline could have been " Drought Over" ..  corn crop expected to be 15% greater that 2012 as the drought conditions have been replaced with good moisture for spring planing

 

 

anyway.. corn really surged yesterday.. up 40 cents .. we really really need next gen feedstock to get going

 

 

Ethanol’s discount against gasoline tightened to the smallest in more than four months on concern that slower corn planting will boost the cost of producing the biofuel.

The spread contracted by 11.94 cents to 25.65 cents a gallon after an Agriculture Department report showed farmers planted 5 percent of the corn crop as of yesterday, compared with a five-year average of 31 percent. Corn is the primary feedstock for ethanol manufactured in the U.S., with one bushel making at least 2.75 gallons of the fuel. Renewable Identification Numbers, or RINs, advanced.

“Ethanol is definitely trading higher with the boost in corn pricing,” said Dan Flynn, a trader at Price Futures Group in Chicago. “Everybody is behind schedule.”

Denatured ethanol for May delivery rose 11.2 cents, or 4.6 percent, to $2.571 a gallon on the Chicago Board of Trade, the highest price since March 27 and the biggest one-day gain since Sept. 28. Prices have advanced 17 percent this year.

Gasoline for May delivery slipped 0.74 cent, or 0.3 percent, to $2.8275 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations. Ethanol’s discount to gasoline was the narrowest since Dec. 10.

Higher corn costs following drought in the Midwest last year forced ethanol companies to shutter operations and temper output. Prices for the grain have eased on rising inventory estimates and projections that U.S. farmers would boost planting to the most since 1936.

Corn Advances

Corn for May delivery surged 40 cents, the daily limit on the Chicago Board of Trade, rising 6.2 percent to $6.84 a bushel.

The corn crush spread was 8 cents a gallon, down from 12 cents April 26. That compares with minus 35 cents on Dec. 31. The amount doesn’t include revenue from the sale of dried distillers’ grains, a byproduct of ethanol production, which can be fed to livestock.

Flynn said the slow planting progress sparks concern that feedstock availability for ethanol plants might be affected.

Corn-based ethanol RINs increased 7.3 percent to 73.5 cents, the highest price since April 12, data compiled by Bloomberg show. Advanced RINs, which cover biodiesel and Brazilian sugarcane-based ethanol, added 1.3 percent to 78 cents, the most since April 22.

About 42 percent of this year’s corn crop will go toward ethanol production, the USDA said in its April 10 World Agricultural Supply and Demand Estimates report.

Ethanol Production

Ethanol output averaged 853,000 barrels a day in the week ended April 19, down 11 percent from the record 963,000 barrels a day in December 2011, according to the Energy Information Administration, the Energy Department’s statistical arm.

Inventories were at 17.6 million barrels last week, down 19 percent from a year earlier, EIA data show.

In cash market trading, ethanol jumped 8.5 cents to $2.565 a gallon in Chicago; 7 cents to $2.615 in the Gulf; and 5.5 cents to $2.755 on the West Coast, according to data compiled by Bloomberg. In New York, the biofuel sank 2.5 cents to $2.67 a gallon.

West Coast ethanol’s premium to the U.S. Gulf narrowed 1.5 cents to 14 cents while Chicago’s discount to New York shrank 11 cents to 10.5 cents, the tightest differential in two weeks.

Ethanol imports averaged 39,000 barrels a day in the week ended April 19, the first time U.S. companies have made outside purchases of the biofuel since March 29, EIA data show.

Anhydrous ethanol in Sao Paulo cost $2.64 a gallon as of April 19, data compiled by Bloomberg show.

Ethanol-blended gasoline made up 93 percent of the total U.S. gasoline pool, the lowest since March 29, according to EIA.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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Absolutely. Corn's weaknesses have been magnified and distorted. The strengths of it diminished by the established fuel market giants, through many channels.

 

Time for the emergence of new feedstocks less vulnerable to this type of propaganda.

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I agree we need other feedstocks but also remember that anything else such as garbage will probably become valuable and have a price that runs up and down. That's the way our country operates---up and down so somebody can make a buck. Just look at the unexpected hit gold just took. No way it should have happened with the Fed printing paper like crazy. Tremendous buying opportunity for someone.

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I tried to buy gold/silver after that drop...  could not find any...  almost like trying to buy ammunition... "out of stock", "on back order"...

 

What was "sold off" was "paper metals" or "electronically traded funds" (ETF)... not physical.

 

Commodities traders dropped a bunch, drove down the price, now are buying up the same commodities (at lower prices)... they are able to take huge profits.  Many of these are trying to convert their paper assets into solid real assets... hence why I couldn't buy any...

 

When gold, silver and ammunition are all out of stock...  NOT a good sign for the long term stability of an economy much less society.

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As it stands, Lansing has had its warmest April on record, at 7.6", not including rain from this morning. I'm pretty sure it's the significant rain and flooding that caused futures traders to expect that this will lower the corn yield. I believe they can still plant in May, and be fine. At least at this point, the price of ethanol has stabilized.

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Never ceases to amaze me- every year farmers get done planting faster (remember they've had good earnings to allow for equipment upgrades), varieties get better, and though this late planting in cold soils is not good--at this late in the game the soils will warm very rapidly and there is less chance of frost damage now than when corn is planted on April 15. My only fear is the chance of one of those cold wet summers.

I was in a field late last week a half hour north of Green Bay and the frost had just come out- what a muddy mess. (REMEMBER- this is north country- It could be the Packer stadium grass is really just in the perma-frost  ;D )

You should see the potato fields getting planted right now :o

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