Ethanol Update: Crush Spread Plunges, Bush Expresses Concern

Here are today's biggest stories surrounding the sector:

- The combination of March corn climbing 14 cents and March ethanol falling 4.6 cents caused ethanol's crush spread to drop 27 cents today to $1.02. Corn prices shot up as a result of oil's $5 run.

- Investors will be pleased to hear that President Bush renewed his support for ethanol today at the Washington International Renewable Energy Conference. Below is what he had to say:

"The vast majority of [our] ethanol is coming from corn, and that's good. That's good if you're a corn-grower. And it's good if you're worried about national security...Corn ethanol holds a lot of promise, but there's a lot of challenges. If you're a hog-raiser in the United States, you're beginning to worry about the cost of corn to feed your animals. I'm beginning to hear complaints from our cattlemen about the high price of corn. The high price of corn is beginning to affect the price of food...I look forward to the day when people in the parts of our country that have got a lot of forests are able to convert wood chips into fuel...The job of the federal government is to expedite [this] arrival."

Wow! Bush is finally expressing concern over corn-ethanol. That took him a while.

Comments

[mangy cat]

any particular reason to skip BG in the stocks you linked?

btw: what does a lame duck feed on?

[Dr. No]

Well if you think cellulosic ethanol all the way through, and consider that turning forested areas into agricultured will release tons of GHG (just read the two recent science papers in a biggr sense), is cellulosic ethanol from wood chips still such a great idea ???
Because as you turn the wood into ethanol your land needs to be dealt with and you all of sudden created agriculture, which is exactly what the science papers were attacking.

[devassocx]

Even though I voted for the guy...he has turned out to be one
of the biggest idiot presidents of all time(Jimmy Carter, excepted).

No one should pay any attention to him and his thoughts.

[BullMania]

Haha, now the man has realized corn has started to become a problem!! What an idiot.

[Vegasjoe]

Grass fed beef is better for you, not corn fed; I am just pissed my tequila costs more since all the Mexican farmers trashed growing Agave for corn! Maybe corn based ethanol will sell better at Frat parties? Grain alcohol and punch! Oh the days!

[glenerdskinerd]

Let's see, one acre corn equals 400 bushels. 400 bushels makes 1200 gallons (gross) less 900 required for the energy to produce it. $2000 of corn to net $300 dollars of ethanol. At least market forces may stop the buffoon and his idiotic subsidy of ethanol.

One acre farmland corn yields equivalent of 38,000 kWhr.
One acre desert yields 850,000 kWhr solar energy (greener too).
Which one is economically viable long term? duh

[farmer]

Thank you glenerdskinerd. I read a few years back that to produce ethanol it took 1.75 gal to produce 1 gal. We get 140 to 160 bushels per acre. This is in the heart of corn country in a family that has been doing it for 3 generations. So let us say it is 200 bushels per acre. (I do not know where this happens) so it is 600 gal at a cost of 900 gal which equals the 1/1.75 gal. Sounds like a good plan by our government. Also a farmer gets $.80 to $1.00 less/bushel than the price listed on the exchange. No ones seems to know why.

[rbblum]

My interpretation of George Bush's quote (I look forward to the day when people in the parts of our country that have got a lot of forests are able to convert wood chips into fuel...The job of the federal government is to expedite [this] arrival.") is that he (George Bush) wants to encourage total deforestation on US soil. That doesn't sound good for the bird population unless one is considered to be a bird-brain.

[glenerdskinerd]

Thanks farmer for your true report on corn production. All my calculations were based on Google "facts". Ethanol's place is as a fuel additive. It will never be a significant renewable energy source because it returns so little energy for the energy put in. Some think it's a net loss--that's what I think you suggested. Market forces will bear this out. Beware pure play ethanol investment. May the weather be good to you

[wheels14]

How many of you are short ethanol stocks? Or own the stock of oil companies. I own stock in both. I am short neither.