Futures market not BIG enough to cover large volume. No risk takers ... no more banks holding the bag.
See today correction in spot, nearby months, and all the way into 2015.
Sorry... ADM has another strike against it as well:
o unrelated to above but in the totality a negative ( I think)
o their last pruchase was for some European assets
o With the euro going down ( up 130's tp 1.29), there will some
There might be some currency hedging there.... But we will have to wait to see ...
A Sell for me until ADM reacts to the ethanol price changes.
May be aorund low 40's, re-assess.
One would hope that a global energy player would have the sophistication to use futures contracts to ensure some price stability to the product in question. Translation: ADM is not at the mercy of spot ethanol prices. Good try, though.
Being a large ethanol producer, this segment revenue will take a hit.
Once there is a surplus, ethanol is a commodity with fast price reaction(like we see today).
Since corn feedstock for ethaol is more than ample, watch out for price diving.
1.50/gallon not out of the picture with $3 corn.
The ethanol unit should have a great year. A bumper corn crop in the U.S. and high demand for ethanol in South America will help boost both top and bottom lines.
Ever try to eat your cell phone or TV? Food is still what every person needs every day. That is why I bought this stock and have done very well with it.
Looking back I bought it in 1991 at $8. But it was back down to $8.40 in August 2000 and also slumped to $20.40 in Oct 2008.
The quarterly dividend was a penny a share back in 1991 but there was also an annual 5% stock dividend that was discontinued long ago. But the quarterly dividend was only a nickel back in 2002 so the climb to current 24 cents has been staeady and significant. And it goes up EVERY year.
I have held this forever. Never seems to do anything. Seemed like a dog most of the time but dividend steadily inreases. And now "suddenly" the shares are at 50 and my basis is $8. I guess there is something for long term holding.
Like others in the ethanol industry, since ADM is one of the highest capacity and sales,
a) DDG prices will affect 2Q and forecast
b) Transporation of goods to China (corn and DDG?)
Separately, adjustment for corn value in inventory might be a bog hit.
significant enough for a dip...