With all the ethanol frenzy surrounding the energy bill, ethanol stocks
have greatly benefited. Pacific Ethanol (
PEIX) shares have shot up
27.98% to $7.73 since the Senate passed its version of the bill last Thursday. Shares of Aventine (
AVR) and VeraSun (
VSE) have risen
12.93% and
8.5%,
respectively. To add fuel to the fire, the White House has said that
President Bush will sign the bill Wednesday. Commodity Futures have
also swung towards ethanol's favor. March corn on the CBOT fell 6.75
cents today to settle at $4.32 per bushel. Meanwhile, January ethanol
on the CBOT gained 2.4 cents to $2.13 per gallon as this is the ninth
day in a row ethanol prices have gone up. As a result, ethanol's crush
spread has hit $1.6552 which hasn't been this high for several months:
| Date | CBOT ethanol price | CBOT corn price | Crush spread |
| December 18th | $2.13 | $4.32 | $1.66 |
| December 15th | $2.08 | $4.38 | $1.44 |
| December 10th | $1.88 | $4.17 | $1.09 |
| November 19th | $1.81 | $3.94 | $1.12 |
| October 16th | $1.61 | $3.74 | $.77 |
| September 1st | $1.54 | $3.69 | $.62 |
Corn,
which is trading at a very high price right now, is expected to trade
lower in the coming days due to profit taking. With ethanol's recent
success and favorable environment, it continues to be an appealing
short term play. Since November 20th, Pacific Ethanol has jumped
73%, VeraSun
58% and Aventine
49%.
