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Ethanol plants as Feed suppliers.. the story of two Co's from San Antonio.
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Tileman2
Posted 3/27/2020 09:15 (#8142749 - in reply to #8142568)
Subject: RE: Ethanol plants as Feed suppliers.. the story of two Co's from San Antonio.


NW IN
Good stuff, as always, Jon.

The entire energy conundrum right now is ETOH went from a 55 cent discount to a 40 cent premium to RBOB in about 10 trading days. The energy supply chain is a behemoth so it's like the butterfly effect...a little ripple in our pond creates a tsunami somewhere down stream.

I've been stewing on the possible outcomes and the one great variable in all of this is the EPA and .gov. How, when, what, where from them may disrupt things for a very long time.

Most refineries are running 84 octane gas, so assuming no exemptions on octane levels, they have to blend something. The octane additives that come out of the inbound crude stream in the refining process are 1. very valuable (can be sold a much higher prices to other industries) and 2. mostly carcinogenic and highly toxic.

So therein lies the rub...if MTBE or other components get cheap enough, do they find there way back in to gasoline? Does gasoline demand remain subdued for 30 days? 90 days? Longer? Does RBOB rally? Does ETOH slide or rally based on plant closures and available supply?

LOTS of possible outcomes and LOTS of variables in the equation!!!

Thanks for posting.
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