Tough Week for Ethanol Stocks

Ethanol stocks took a beating this past week as corn soared and ethanol stalled. The top losers were Pacific Ethanol (PEIX) and VeraSun (VSE) as shares of the two companies collapsed 22% and 20%, respectively.

Corn finished strong on Friday, settling 20 cents higher to $4.95 per bushel on lower-than-expected crop production, quarterly stocks, and ending stocks data. As for ethanol, prices have dropped 21 cents since hitting $2.42 per gallon on January 2nd. As a result, ethanol's crush spread has dropped significantly to $1.18.

Date	CBOT ethanol price	CBOT corn price	Crush spread
January 11th	$2.21	$4.95	$1.18
January 2nd	$2.42	$4.62	$2.15
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

Comments

[Tom B:]

Ethanol is a bubble. It make NO SENSE technologically, since you use more energy than you get. It ONLY exists to feed farm subsidy money to Republican Bible Belt States.

2008 Jan 14 09:15 AM

[Robert Young:]

From Mr. Barta`s comments, he either knows nothing about ethanol,agriculture,an... farm subsidies or he is a BIG OIL Liberal.No one ever talks about how much energy it takes to produce a gallon of gasoline!After a gallon of gas is produced,how much,high protein pet and livestock feed is left? That big fat farm bill,80%of the money goes to welfare(school lunches,WIC,etc...),th... last two years, grain prices have been to high, to receive L.D.P. payments. Now for the biggest LIE of all! Burning our food for fuel!!! 80% plus,of the corn grown in the U.S.A. is feed grade(not for humans). Lifeline Foods,St. Joe,Mo. has been making every kind of edible food product from corn for years,(never could pay a dividend!!!!)they have added an ethanol plant,behind the food process,to use the food by-product to make ethanol!!! Don`t try to blame ethanol for high dairy prices either,our dairy exports have jumped over 15%,while our dairy farmers have declined in numbers(most went broke,subsiding the american comsumer for years) The American Farmer does not set a price for his produce,the commidity buyers tell him what they will give.

2008 Jan 14 09:22 PM