Biofuel Industry Follow The Crude Oil Sell-Off; The Corn & Ethanol Report

We did see some short covering as the May contract tested critical support at 302. Demand for U.S. exports are getting better as countries around the globe are in shut down mode and they are stockpiling on food for human consumption. Rains today and forecasted heading into the weekend could slow plantings which is near 7% complete. Individual states like Kansas 6% planted, Missouri 4%, Illinois 8% and Indiana 4%. Let’s see how tomorrows Export Sales data comes out and give this market a needed bounce.

On the Ethanol front close to 30% of plants idled with gasoline demand declining which is crushing the biofuel industry. With so much biofuel demand erased, U.S. Corn prices are at a 10-year low. Guardian Energy in southern Minnesota, the states largest ethanol plant which normally employs around 50 people has closed the plant April 2nd through May. The CEO Jeanne Mc Caherty was quoted, “we hope to reopen by June 1st, that’s are goal”. Several Minnesota Ethanol plants, including four operated by Sioux Falls, S.D. based Poet, are running on reduced production levels. Poet, one of the largest U.S. ethanol producers, has idled two plants in Iowa and another in South Dakota. One Minnesota ethanol maker, The Corn Plus co-op in Winnebago, closed in September, it was losing $100,000 a week.

Randall Doyal, CEO of Al-Corn Clean Fuel said, the fuel market is telling us to shut down and not operate”, he also said Economically its abysmal. He further went on to say,” your better not operating because your losing money operating. But I am hardheaded and I don’t like (shutting down) as an answer, we are owned by farmers and they don’t like that answer either”.

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