 | Back @ the Ranch: Short Ethanolby cuervoslaugh on June 20th, 2008 at 6:36 am |
If anyone had heeded to my call on June 10 they would have picked up some (DBA: 24.85 0.00%) and made a tidy $2.30/share profit as a second wave of storms pummeled the US midwest and caused general mayhem and concern.
Now, this morning marketwatch.com has an interesting article on a side effect of the storm - from Rising corn prices threaten US output:
Nearly three-quarters of U.S. ethanol plants could face a possible shutdown as profit turns negative, says Citigroup.
(BIOF: 0.31 0.00%) another big ethanol producer, to report a loss of 46 cents per share this year, 32% wider than last year’s loss.
Corn futures have jumped 64% this year to $7.463 a bushel Wednesday, a record closing high. In contrast, ethanol front-month futures closed at $2.937 a gallon — also a record high, but only up 24% this year.
Citi’s Driscoll said at least five plants have already closed and that’s just the beginning. In the next few months, nearly 120 of the nation’s 160 plants could risk shutting down, he said.
The USDA projects corn use for ethanol will reach 4 billion bushels in 2009, almost doubling the 2007 level and accounting for 34% of corn production. In comparison, U.S. corn production is projected to rise only 11% in the same period.
The Takeaway
Short this guy (if you are that type of investor) (ADM: 22.14 0.00%)
Invest more here (DBA: 24.85 0.00%)
Theme song:
Disclaimer
Do your own freakin’ homework. I do this as an amateur and like blabbing about stocks and the market in general. Information (no matter how right or wrong) is provided for entertainment purposes. You think a professional would link songs to their recommendations?
I actually did pick some up, but only have made $1.42/share so far.
Good call. Plus I also think someone else was beating the DBA drum earlier, maybe not though I can’t remember.
June 20th, 2008 at 6:57 amI’m lovin’ the theme song.They should be mandatory from here on out.
June 20th, 2008 at 8:16 amAin’t nothin like a mellow country man to keep a girl happy.
June 20th, 2008 at 10:13 amDear Boca,
I live in ranch country, but I’m not all that mellow. Is there hope for me?
My wife says “no”.
How does one “mellow out”?
signed,
June 20th, 2008 at 10:25 amSleepless and Agitated in Pleasantville.
Alpha, your wife is probably right, there’s not much hope (sorry man). Being hyper helps in the stock trading world though, so there’s some upside. But you know we’re all fond of you here even if you’re not mellow. Hell, this is site is like Dunkin’ Donuts for hyper people.
My best suggestion to mellow out: Sunday cook yourself up a big old Sunday midday dinner, pork chops or chicken, greens on the side, giant salad, homemade corn bread or corn muffins, or corn on the cob or Mexican rice, and lots of ice tea. Invite your family and friends over and just see how you feel, by the end of the day you won’t be thinking about stocks and you’ll be mellow and smiling. Alcoholic beverages optional for those who drink. Please practice firearm safety.
June 20th, 2008 at 10:34 amGood advice, boca. After gorging on all that Sunday food, I’ll probably fall asleep for the afternoon. Does that qualify as being mellow?
Thanks.
June 20th, 2008 at 10:37 amYes, napping is good, Alpha LOL.
June 20th, 2008 at 10:39 amThing is, with all that food, I’ll have to sacrifice the six pack abs, you know.
June 20th, 2008 at 10:44 amNot to worry, I love big men, Alpha. I like skinny men too. Love ‘em all, really.
June 20th, 2008 at 11:08 amEinstein was said to have had many “alpha naps” and that’s where all his great ideas came from.
June 20th, 2008 at 8:42 pmcuervo,
thanks for the shout on DBA. I did take a crack at it two days after you pitched it.
http://www.ibankcoin.com/alphablog/index.php/2008/06/12/nice-try/
It works for me. I’ve allocated about 5% to farm related products.
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June 20th, 2008 at 10:01 pmCaught a couple of nice Rainbows on the way home from the office late this afternoon. Killed and grilled. We just finished consuming them with a couple of Alaskan Ambers.