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Ethanol going forward
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Baby Robin
Posted 1/13/2021 12:13 (#8747969 - in reply to #8747678)
Subject: RE: Ethanol going forward


Fontanelle, IA
Maybe the “trend” has changed with huge corporations and commodity risk management teams taking over the hedging for ethanol plants...

In the past, I would bet that most corn is “hedged” in the cash market vs. the CME. Then, ethanol was spot cash sold either daily or weekly due to the ill-liquid nature of ethanol contracts. Hence, back-to-back hedging of input and output to lock in the processing margin FOB plant. Price of ethanol is usually inverted.... worth more today than a month from now.... usually....

VeraSun taught the industry a lesson about cowboying the procurement side with the board.
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