(California’s Low Carbon Fuel Standard, will be phased in starting in 2011, reports the Akron Beacon Journal)
If history is any guide we should see a jump in shares of (NASDAQ:PEIX).
Here is a link to historical prices of (PEIX) last year at this time frame.
Although this time a jump by ethanol stocks actually has solid developments to support it:
Pacific Ethanol Stockton Facility Successfully Resumes Operations
SACRAMENTO, Calif., Jan. 4, 2011 (GLOBE NEWSWIRE) -- Pacific Ethanol, Inc. (NYSE:PEI) (Nasdaq:PEIX - News), the leading West Coast marketer and producer of low-carbon renewable fuels has resumed production at the 60 million gallon per year ethanol production facility located in Stockton, CA. The first corn grind occurred on December 9th and the facility is now operating at close to operating capacity shipping ethanol and feed to local markets.Neil Koehler, PEI's president and CEO, stated, "We achieved our goal of successfully restarting the Stockton ethanol facility in December 2010, which we believe increases our opportunity to benefit from the commencement of the California Low-Carbon Fuel Standard this month. The Stockton facility produces low carbon renewable fuel and high value feed to local California markets. With the recent signing of the participation agreement with the California Energy Commission, the facility is eligible for payments under the California Ethanol Producer Incentive Program."
Ethanol Futures Cap Best Year Since Contract Began in 2005
Ethanol futures rose in Chicago, capping their best year on record, as higher corn prices threatened to increase production costs for the fuel.
The grain-based additive gained for the 18th day this month on speculation that warm, dry weather in South America will harm corn crops, boosting the value of U.S. supplies. Corn is the primary ingredient in ethanol produced in the U.S. One bushel distills into about 2.75 gallons of the gasoline supplement.
“Absolutely, you’re getting strength straight from the corn,” said Dan Flynn, a trader at PFGBest in Chicago. “Corn fundamentals remain pretty bullish and ethanol is a wildcard factor. Ethanol is just following suit.”
Denatured ethanol for January delivery advanced 3 cents, or 1.3 percent, to settle at $2.378 a gallon on the Chicago Board of Trade, the highest close since Nov. 3. The futures climbed 22 percent this year, the most since the contract began trading in May 2005.
Corn futures for March delivery rose 13 cents, or 2.1 percent, to close at $6.29 a bushel.
Ethanol also followed crude oil and gasoline higher as the dollar weakened against the euro, increasing the luster of commodities as an alternative investment.
Oil for February delivery climbed $1.54, or 1.7 percent, to settle at $91.38 on the New York Mercantile Exchange. Prices fell 13 cents this week and rose 8.6 percent in December.
Gasoline for January delivery advanced 6.14 cents, or 2.6 percent, to settle at $2.4532 a gallon, the highest closing price since Sept. 30, 2008. The contract covers reformulated gasoline, which is made to be blended with ethanol before delivery to filling stations.
To contact the reporter on this story: Mario Parker in Chicago at firstname.lastname@example.org.
To contact the editor responsible for this story: Dan Stets at email@example.com.