Corn's Perfect Storm

Quote from scriabinop23:

thanks I found it as well.

What explains the discount (besides energy content) that ethanol trades at vs gasoline?
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Subsidies...
ah, the government...
 
Quote from Rtrader2525:

In general. I trade mainly kc and chi never traded Minni. I feel mildly bullish, commercials will hoard IMO. I hand chart alot of different wheat spreads and the march 09 july 09 chi spread has tightened up a decent amount. It feels strong. but we shall see.
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I don't watch the KC contracts. Not enough liquidity for me.

CHI - July 09 - Been long since June 9th @ 9.0000. I have a target of 11.3500 but I have a tight stop at 9.2725. I liked the last LONG lfrom the end of Sept much better.

I'm missing some data for March that I'm currently fixing so sorry I can't help you more there.

Overall, like I said earlier, eWheat is trying to creat a top but for me every extreme pullback that doesn't break support is just another reason to add to the LONG position.
 
Quote from PohPoh:

Subsidies...
ah, the government...
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Sure about that?

The subsidies increase the margin of the producer (thus justifying them to spend more on corn), but the market price should be similar to the fuel it substitutes, gasoline (or fractionally equivilent based on mileage .. ie if it has 90% of gasoline's energy, it should be 90% the price of gasolne) assuming all other variables are equal.

According to this, the problem is distribution.

http://www.nytimes.com/2007/09/30/business/30ethanol.html

And then on the other side, I'd imagine another problem is depressed gasoline crack spreads as well. If the gas cracks expanded to $30 right now, I'm sure ethanol producers would have a better market to produce in.
 
Quote from scriabinop23:

Sure about that?

The subsidies increase the margin of the producer (thus justifying them to spend more on corn), but the market price should be similar to the fuel it substitutes, gasoline (or fractionally equivilent based on mileage .. ie if it has 90% of gasoline's energy, it should be 90% the price of gasolne) assuming all other variables are equal.

According to this, the problem is distribution.

http://www.nytimes.com/2007/09/30/business/30ethanol.html

And then on the other side, I'd imagine another problem is depressed gasoline crack spreads as well. If the gas cracks expanded to $30 right now, I'm sure ethanol producers would have a better market to produce in.
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Subsidies have always been THE problem and I was born, raised & live on a farm by the way.
 
Quote from ProfLogic:

I don't watch the KC contracts. Not enough liquidity for me.

CHI - July 09 - Been long since June 9th @ 9.0000. I have a target of 11.3500 but I have a tight stop at 9.2725. I liked the last LONG lfrom the end of Sept much better.

I'm missing some data for March that I'm currently fixing so sorry I can't help you more there.

Overall, like I said earlier, eWheat is trying to creat a top but for me every extreme pullback that doesn't break support is just another reason to add to the LONG position.
More...

I rarely take naked pos. in any grain or anything for that matter so I rarely watch any kind of induvidual price movement, just spread spread spread. I know I greatly diminish earning capacity but risk is well maintained. And with how out of whack the Chi wheat spreads got last year there was huge huge huge profit potential. Thanks prof
 
Okay, I'm a noob on ags.

Someone give me a reason why corn-dependant entities such as ADM, Pacific Ethanol and many, many beef, chicken and even fertilizer companies won't take it on the chin since the flooding in Iowa and the heavy rains in the midwest, as these events have impaired planting and growing.

Thanks.
 
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