onida, south dakota | buckshot24 - 7/20/2012 00:30 how big of a setback do you see in prices if the big O gets on the stand? corn and soys..... it depends how profitable ethanol is
to see us cut back usage to the 2007 type usage could give us tremendous downside
i would think that him on the stand waiving the mandate is limit down for at least a couple of sessions........but that might not solve things as ethanol plants will run if it makes sense to run
talking to a couple ethanol plants today i got the feeling things had picked back up a little bit for them
one of them sounded like they might pop production back up.......i think worried that as soon as they did that things would get too tight too fast......but between the lines it felt like they where trying to increase production back up as they had dropped it down
another plant i talked to is still running 100% and he said it just cost way too much to not run 100%
the first plant has rather low fixed costs.......and the second plant is a newer one
bottom line is cutting the mandate doesn't mean ethanol production automatically drops off......it causes the market to drop off; which probably makes ethanol more profitable..........
so prediciton (probably bad prediction) would be that if manadates are cut and we get the dollar or two drop that sometime down the road we have prices higher then they are when the mandate is lifted..........lifting the manadate doesn't shut ethanol plants down.....it just eases the stress on the blenders........ethanol production gets curved from profit margins.......that have bounced the past few days........ |
I can't be the only one
