Prices will adjust up.
Katie Micik DTN Markets Editor
Bio | Blog
Wed Dec 17, 2014 02:59 PM CST
OMAHA (DTN) -- Agriculture Secretary Tom Vilsack said China's Vice Premier Wang Yang told him China has approved the MIR 162 trait for import at a U.S.-China trade meeting in Chicago, Dow Jones Newswires reported. Two soybean varieties were also approved.
China began rejecting shipments of U.S. corn in November 2013 because the presence of MIR 162, also known as Syngenta's Agrisure Viptera, violated its no-tolerance policy on unapproved biotech traits. (DTN file photo)
A Syngenta spokesman told DTN that the company is still waiting to receive the official documentation from China, and it will wait to make an announcement until then.
Production just shy by 10kbpd of 1million barrels per day!
Refiner Demand UP 20,000 barrels per day or 140,000 for the week
Export is taking the balance 130,000 barrels per day plus 91,000 from Inventory.
BY now, the market demand is running on Spot prices since there was a vey thin
Watch out for any hick-up anywhere in the supply line.
Demand from shopping trips will keep demand strong
(specially with these new trucks just purchased)
Not just for ethanol, but for gasoline as well.
Logistic to the west coast just causes their price is higher.
Corn growing is not sustainable out west.
Nothing new, ethanol likewise.
The advanced biofuel tax credit Of $1/gallon was being discussed for 1 or 2 year, and retroactive to 2014 production...
addt his net to the bottom line of 4Q?
Gevo has not been in a position before where there was a $1 Credit gallon AND having prodcuts sold.
I wonder If we have missed calling this one out?
With Spending bill now in the can and the Senate turn to act...are tax credit dollars
in the pipeline for ISO?
froman article on ASMT D7875,I note
"said ASTM member Glenn Johnston, executive vice president of regulatory affairs at Gevo Inc. “It is also being used in many chemical applications that include paints and coatings.”...
Ethanol producers taking someof their cash profits to form a kitty for gas stations owners to modify their pumping stations.
Seach on the article : Prime the Pump seeks to expand E15 infrastructure
Supplywill get tighter.
Do a Search on :Prime the Pump seeks to expand E15 infrastructure
West coast will benefit indirectly as supply / demand balnce gets even tighter.
But I always thought that the HIGH margins and profits booked by the ethanol producers should go toward the pumpng stations. 1.You sell more gallons 2. More imporatantly the station owners become allies. Think, NK. Think how to spend the cash!
Their plants are bought for very, very low cost ( during a period of industry crisis). SO book is not wha the plants are worth, but what they acquired at. Plus over the years, you depreciate the assets. If depreciation is bigger than what you need to invest in capex, then book value decreases further. Note Maintenance costs are expenses not capex.
If refiner volume is not under contract, export demand taking on all extra production supply.
Running at max, only spot volume to close out the quarter. Ethanol Spot is at a premium over RBOB quotes.
Notice that Ethanol EIA total inventory bump 500K is ZERO percent in the production centers.
Gulf Pad has a delta from last week of 700K barrels. Most likely, IN TRANSIT,
waiting for the boats to head out for export.
Watch Spot prices for tightness, not January CME quotes.
Margins is not easily earned.
REX did its way!
1. cheap corn
2. sell ahead ethanol and DDG
3. build silos to store cheap corns
4. build storage for plant output in case there is hick-up to ship, Keep plant running
5. Sell all you make
6 Pay down all debts
Retired many shares on 'dips'. Low Price earnings.
Since corn is relatively low, less cash is needed for supply. And lower interest rates.
Hummm? what is in the works?
Guess no 0: run plants ABOVE nameplate rate. Use revolver line to increase supplly?
No1 lock in natgas feedstock. Sale in peak period or use during spring window?.
No.2 expand algea production?
No 3 lower forward sales rate, increase spot sales?
No 4 buy more cows on the feed lots?
Average ethanol spot margins for October - November was between 70-80c /gallon, and now close to $1/galon.
So this should throw $2.5M-$3M into Gevo's kitty (based on 4.5m gallons /quarte).
So, for 4Q14, how is the iso milestone of 50-100K/month rate going?
For the analysts!
They only see CBOT quoted prices.
REX and PEIX proves that cash flow is and can be on spot market.
In an evnironment where export demand is moping up supply,
not a bad strategy. GPRE does it 50 lock /50 spot witht their higher capacity, a safer play
But the analysts have been caught by surprise margins.
So are the refiners who are not buying ahead.
The refiners are competing with export for supply and they donot realize it yet.
Inventory: 17.3m up 200K... but tight as ever
Production: 962kbpd down 20Kbpd ( to match refiner demand)
Refiner demand: 856Kbpd down 18kbpd
Export(estimates) 942K ( approx)
( Delta prod-refiner = 106kbpd, times 7 = 1042K, less inventory 200k(approx) = 942k
o 200K Inventory build is in Miwest PAD at 5.9M from 5.7M. Midwest plants just pumping it out to the export pipeline.
o All other PADs at same - low- level as prior week.
o Given that Industry was running flat out to catch up with peak driving week ( Thanksgivings) and with exports, expect slow refiner inventory build for winter to avoid transporation issues later on[January-Feb].
o Margins are best when plants are running flat-out.
In the case of PEIX and AMTX, becuase of the west cost base, they have now proven the case that they are able to ride the wave of their local WEST coast market. They are 20% of local production while the other 80% supply line is impaired by the transportation issues. This is the wave that they are surfing ( 30c to 40c /gallon extra that they cover with corn and WDG purchases). But more often than average, the SPOT market is out of wackand they benefit from being local.
The stock prices are future earnings driven. But not enough credit is builtin for this factor, specially with winter weather being so early in 4Q.
it took me 3 months(1Q14) to buy into the conditions outthere, but it is real with the oil folks using all the locomotives. Now, with the oil price issue, if the transporation picture changes, you may be right on future prices out west. I maintain that in that case, if there is plenty of wagons available to go outwest, then PEIX should use its cash to buy cheap corn ( just like when the plants were planned out 8 years ago).
For now, 4Q is a good average spread for October and Nov. I have them at 44c per share to date and close to 90c/share by quarter end. This is without them spending it for warrants/plant ownership/bonus shares. That we DONOT KNOW!
Do you have proof of these refiner obligations?
I started following PBR about 6 years ago...
1. In a large enterprise as such, IT IS NOT just one decision, one challeng, one problem.
2. Some of waht we see now are Policies(do it in-house vs sub-contracting), First-of-a-kind jobs(deep sea...), Politics(it happens on my watch therefore my adversaries will challenge whatever...), and yes Fraud.
3. while this is happening, the world is turning ( US economic crisis. world economic slowdown, Russia production after BP Gulf catastrophy, US energy production,and now the efficiency of energy consumption and world economic slowdown requiring less oil - for now )
For Petrobas, while they will have to recognize BOOK COST by depleting the value of their own ASSETS ( like the refinery and so on...), one thing that is not yet taken into consideration: PBR have a LEGAL recourse to some of the FRAUD. Not all of it will fall on PBR books.
At the last CC, the CEO explained that it will take longer for depleted assets to be NET positive but that doe not mean that the assets will be a loss. I interpreted to mean that than X years to have a pay-off on the refinery, the time period will Y years.
But by the same token, I heard PBR CEO make a comment that the Rigs are not the property of PBR. PBR is just leasing these rigs on contracts. Without knowing exactly the numbers, it seems that the RIG OWNERS will take a hit for overcharging for these assets, will have to pay back to PBR for some of the overcharges AND the RIG Owners will have longer for these rigs to have a Net positif pay-off. Furthermore, I am presuming now that With oil exploration slowing down, PBR might get CHEAPER daily rate on these rig contracts---- just assuming that a plan for next ten years ( say 2016-2025).
Fraudulent actors will suffer. But 100Bil barrels (I am guessing a number here...) to be recovered, there is enough natural resources to cover the exploration plans. The funds will not flow as one wanted... but they will flow!