- Current farm bill extended as lawmakers finish negotiations on new package
- Petrobras cements ethanol joint-venture in Japan
- VeraSun’s quarter earnings surprise, management plays up cost advantages of scale
- Ethanol prices post biggest week-on-week increase so far this year
- Prices & Markets
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- Retail E-85
- Spot Grains
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- Futures Corn
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- Also This Week
- Canadian government grants Iogen $500M cellulosic loan
- Top U.S. crude refiner calls for repeal of ag and ethanol credits
- In face of land use concerns, EU President hints at changes to biofuel targets
- Japanese refiners will double use of ethanol through use of ETBE
- Biofuels subsidies should be temporary, says think tank panel
- ConocoPhillips looking into additional ethanol investments
- Brazil may move B-5 mandate up to 2010
- ZeaChem using wood-vinegar to produce ethanol
Also This Week
Iogen’s demonstration facility in Ottawa Canada has been producing cellulosic ethanol, although not for retail sale, since 2004.
Valero Energy would support a 5-cents-a-gallon federal gasoline tax increase in order to pay for road and bridge infrastructure repairs – but only alongside a repeal of tax credits for farmers and ethanol producers.
Since EU leaders fixed renewable targets last year, concerns have risen about possible negative effects from biofuels, including their impact on food prices and the environment.
Japan started selling ETBE-blended gasoline last April, but prices of sugar and corn are relatively high in Japan and globally, have risen even more sharply since.
Although the EU is considering the region as a whole in crafting its bioenergy policy, how to implement the policy would be left to the member states and to the companies residing in them.
Such an undertaking would be worth between one and two billion dollars, though the company would prefer that the technology not involve corn.
The government is also considering whether to make a 3% biodiesel blend binding in July of this year, and may require a 4% blend next year.
ZeaChem uses a novel bacterium, called an acetogen, found in the termite and many other places in nature, which does not produce CO2, but converts all of the breakdown products of wood into acetic acid, Verser said.
The U.S. Congress on Wednesday passed a month-long extension of the 2002 farm bill to give Senate and House negotiators more time to work out the details of the new farm bill. Senate Agriculture Committee Chairman Tom Harkin (D-Iowa), and the farm bill’s Senate-House conference committee, said the short-term extension until April 18 is a sign of progress. On his weekly telephone conference with reporters, Harkin said Friday that progress on the farm bill was being made, though in the past week had been hampered by House Ways and Means Committee Chairman Charles Rangel's (D-N.Y.) having been hospitalized with the flu. Chief negotiators from the House and Senate have otherwise been meeting daily.“Talks continue on a bipartisan basis between Senate and House negotiators, and each day brings us closer to resolution,” said Harkin, adding that he would not have pushed for the short-term extension unless he'd had a strong level of confidence that a farm bill is “within a few more weeks.”“Our mission is to reach agreement on the framework within the $10 billion of new funding that we expect to be available,” he said. “We want to maintain the main elements of the House- and Senate-passed bills.”
Petrobras has deepened its marketing relationship with Japan’s Mitsui & Co., announcing today it had formed a 50:50 joint venture with Mitsui to ship ethanol to the Japanese market. The new joint venture, called Participacoes Nippo Brasileira em Complexos Bioenergeticos SA, follows nearly two years of selling ethanol through Mitsui – Japan’s third-largest trading company. It also opens a new front in the Brazilian state-owned oil company’s efforts to transform itself into a major supplier of biofuels.Petrobras and Mitsui had previously formed a JV with Brazilian builder Camargo Correa to build the world's first ethanol-only pipeline.
Fourth quarter profits at soon-to-be No. 1 U.S. ethanol producer VeraSun Energy were diminished on high feedstock costs but results still beat the expectations of Wall Street analysts, who had predicted a loss.Brookings, S.D.-based VeraSun's net income fell 81.4% to $4 million, or 4 cents per share, from $21.4 million, or 27 cents per share, a year earlier; while gross margin dropped to 9.9% from 27.9 percent in the fourth quarter of 2006.Analysts had expected a loss of 3 cents per share on revenue of $297.7 million, on average, according to a Thomson Financial survey.On the conference call to discuss the earnings results with analysts last week, VeraSun attributed their better than expected outcome on Wall Street's selling short the company's ability to realize cost savings as it sharply increased production and sales. Though prices for ethanol sank by an average of 30 cents per gallon, VeraSun ramped production to 142.1 million gallons and sold 134.4 million gallons of ethanol, both records for the company. Chief Executive Don Endres made it a point to stress, as he has on previous calls, that the ethanol market is growing not merely because of the Federal government mandates but because the economics of ethanol blending encourage it, which is true – when the 50 cent per gallon blenders’ incentive is applied.
Rack ethanol markets were greatly improved last week, tracking higher prices for RBOB and following generally lower refiner inventories for the fuel additive. Ethanol prices gained 12 to 15 cents per gallon in nearly all tracked markets over the previous week. Gains in New York Harbor and along the East Coast were slightly less dramatic, improving a mere nine to 10 cents on average.Nationally, ethanol prices shot up to $2.52 per gallon, according to surveys conducted by EBN, an increase of 14 cents, or 5.8%, over last week’s national average.