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| On cash corn purchases yes, if they can buy a cheap basis for deferred months they will. I'm talking about locking in a crush on the board. Look at current ethanol and corn prices. The ethanol board is typically inverted, while the corn board is at a carry. That means in the nearby month ethanol is worth the most and corn is worth the least, if you try and lock in 12 months out, corn is going to be worth much more and ethanol much less, that's why they typically operate in the spot market or not more then a couple months out.
I would say your assumption is probably the opposite, maybe 20% who have crush locked in for the a couple months out and 80% operating on crush margin. Obviously this will vary depending on events in the market. | |
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Ethanol buyers beware.. Winter is coming..
