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Adams, NE | You carry because there is contango in prices. The contango in ethanol is lower than other liquid fuels today, so there will be zero conversion of non-ethanol tanks. Additionally, railcars are still at $1,000/month so you cannot justify carrying ethanol in that is the cost of the least is 3.44 cpg.
Finally, ethanol is historically backwardate so there has been little investment in tanks for storage. Tanks are for put thru, at the plant or at the terminal. Storage is rising and the margin bulls and the corn bulls should be concerned until it stops. At these margins, the incentive to slow down production is zero as that only increases your costs and just means you lose more. | |
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Ethanol stocks vs Crude Oil Stocks.. 144 Rotary Rigs now parked.
