This post was writtenby Minyanville contributor Ryan Krueger.
Looks like Verasun Energy Corp. (NYSE: VSE), a formerly popular ethanol stock and second largest producer, has won court permission to cancel contracts signed to purchase corn. It is now in bankruptcy. I'm also hearing about a lot of excess ethanol funded by your tax dollars being sold to other countries. That worked out well.
The mistaken policy and debates are endless, the trades are what I am chewing on instead. I think consumers of corn at lower prices are set up for some awfully tasty '09 comparisons for their bottom lines. Corn Products International, Inc. (NYSE: CPO), after Bunge Limited (NYSE: BG) backed away from its take-over, is a name I have re-entered from the long side after closing out my position just after the non-merger was announced and shares traded twice what they are now. They sweeten something you'll eat or drink in the next hour.
Longer term, however, I am even more interested in the ingredients, not the end products. But it's still early. I have been long gone from 2008 corn contracts for quite some time, but am starting to poke around out on the futures curve. On the same day this court ruling was announced abolishing artificial demand, quiet real demand emerged as Mexico was a big buyer of corn.
I'll take a few billion eaters over several million drivers any day.
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Reader Comments (Page 1 of 1)
12-03-2008 @ 6:14PM
Iridium said...
Ethanol was a false promise of a product made to buy votes from corn growers and enrich fat cat traders.
Ethanol from corn was one of the worst ideas in history. Probably a worse idea than licking a plague rat.
Ethanol helped to cause one of the biggest commodity bubbles in history and continues to be a major problem.
Home Depot will probably profit from all the lawn equipment that is going to stop working due to E10. A lot of motorcycles have problems as well.
The best thing in the world would be for corn based Ethanol to disappear.
12-03-2008 @ 6:30PM
Fed Up said...
Ahh, Govt knee jerk reaction at it's best. Right up there with all the lobbyist subsidies. Congratulations to the nimrods in Govt. both sides, and the speculators, you made a lot of money and wrecked this Great Country's economy. Have a happy christmas while regular folks, whose money you are begging for, are foreclosed on. Words fail me.