Ethanol

Last week ethanol producer Green Plains (GPRE:  Nasdaq) reported financial results for the quarter ending June 2018.   As expected the company reported a net loss, but actual results were far better than expected.  The news gave traders a reason to celebrate with bids that led to a gap higher at the opening on the first day of trading following the announcement.  Cooler heads came into the market as the day wore on and the stock closed below the open on heavy volume. Nonetheless, the stock finished the week higher and appears prepared to challenge lines of volume-related price resistance in the trading sessions ahead.    There may...

As quickly as the ethanol producer jumped into the cattle business, Green Plains (GPRE:  Nasdaq) has sold off half of its Green Plains Cattle Company to a group of investment funds for $77 million.  Operating at six locations in Colorado, Kansas, Texas and Missouri, the company has the capacity to feed 355,000 head of cattle each year.  The cattle business contributed $271 million to total revenue in the most recently reported quarter ending June 2019, delivering a modest operating profit near $7.3 million. There has been considerable stress in the feed cattle industry.  The number of cattle in feedlots is down compared to last year, an unusual development...

by Debra Fiakas, CFA The Trump Administration is using tariffs on China goods as a trade war tactic to pressure China into relenting to U.S. trade policy demands.  Unfortunately, the fallout has been heavy and widespread.  Farmers have taken the heaviest hits as China has dropped orders for corn and soybeans.  Ethanol producers have been ensnared in the trade war skirmish as well and in recent weeks have been caught an uncomfortable ‘pincer-like’ squeeze by the Trump Administration. Trump’s Environmental Protection Agency has continued its practice of granting waivers to oil and gas refiners, eliminating the requirement to blend biofuel with the refiners’ petroleum...

by Jim Lane The Top Line. In California, Aemetis (AMTX) reported that Q2 revenues increased $4.3 million and gross margins increased by $1.1 million compared to the second quarter of 2017. Similarly, during the first half of 2018, revenues increased $15.7 million and gross margins increased by $3.5 million compared to the first half of 2017. Revenues were $45.0 million for the second quarter of 2018 compared to $40.8 million for the second quarter of 2017, driven by an increase in ethanol sales volumes from 15.6 million gallons to 16.4 million gallons and by stronger wet distillers grain and glycerin demand and pricing. Operating loss...

by Jim Lane Three big product announcements just in… DSM (e) breaks through on yield, efficiency with new yeast, enzyme offerings for corn fiber conversion. Novozymes (Copenhagen:NZYM-B; OTC:NVZMY) launches breakthrough techs “Fortiva” and “Innova Force”. DuPont (DD) extends with corn oil extraction tech. In Indiana, DSM leads the news out of the Fuel Ethanol Workshops with their latest yeast and enzyme offerings, eBOOST GT and eBREAK 1000F. Up to 60 percent GA reduction We’ve seen the eBOOST brand over the past year — so here’s a significant cost savings opportunity in the form of a line extension. eBOOST GT, which has been tested and qualified at commercial...

Yay or Nay for EPA? RFS Volumes out for 2020, Biodiesel for 2021 – What’s the reaction from industry? by Jim Lane What’s the reaction from industry? Coal for Christmas? Should Santa bring coal for EPA’s stocking this year? Do the biofuels and agriculture industries think the EPA just put coal in their stocking? Is it thumbs up or thumbs down from biofuel industry advocates on last week’s U.S. Environmental Protection Agency renewable fuel volumes? What about the exempted volumes? The Ruling – Rotten or Respectable? First, a bit on the EPA ruling that establishes the required renewable volumes under the Renewable Fuel Standard (RFS) program for...