Standpoint Research downgraded Archer Daniels Midland (NYSE:ADM) today from "Buy" to "Hold."
Since June 7 when they hit $24.51, the company has been on a tear, rising to $32.32.35 today (although they're down in today's session).
Standpoint said the valuation and increase of 30 percent during that time leaves little room for upward movement.
ADM has been trying to push ethanol on us in order to gain from the increased demand, but that has been fought against by an increasing number of people because of the damage done to equipment and cars, and the huge amounts of input needed to raise corn.
Showing posts with label Corn Ethanol. Show all posts
Showing posts with label Corn Ethanol. Show all posts
Tuesday, September 14, 2010
Friday, July 16, 2010
September Corn Futures Up on Perceived Demand
Several factors have been moving the price of grains lately, not the least of which has been dry and hot weather in the western and eastern portions of the Midwest in the United States. That has resulted in corn prices going higher, as uncertainty concerning the needed rain and if it'll come remains.
But corn has been unwound some from its grain cousins, with the ethanol factor being always in play, as well as the growing demand from China. Both of these are been increasing in 2010.
Recent data from the USDA shows there was less corn acreage planted than originally estimated, and production estimates were also lowered on July 9 by almost 1 percent, to 13,245 billion bushels. The corn production estimate cut came from the corn acreage report.
Even so, we're still on a production course to reach record highs this year, which means there is a lot of optimism concerning surging demand.
Another factor on the negative side, as far as corn prices go, is the possibility of cutting the ethanol subsidy program, which has increasingly come under fire for its costs and controversy over damage to power equipment and some cars, as well as the environment.
The budget crisis and outrageous spending of the Obama administration has led us to that place.
There is mounting pressure to eliminate the ethanol tax subsidies, and even proponents are talking of cutting it by 9 cents from the current 45 cents a gallon, to possibly 36 cents a gallon for the subsidy.
But corn has been unwound some from its grain cousins, with the ethanol factor being always in play, as well as the growing demand from China. Both of these are been increasing in 2010.
Recent data from the USDA shows there was less corn acreage planted than originally estimated, and production estimates were also lowered on July 9 by almost 1 percent, to 13,245 billion bushels. The corn production estimate cut came from the corn acreage report.
Even so, we're still on a production course to reach record highs this year, which means there is a lot of optimism concerning surging demand.
Another factor on the negative side, as far as corn prices go, is the possibility of cutting the ethanol subsidy program, which has increasingly come under fire for its costs and controversy over damage to power equipment and some cars, as well as the environment.
The budget crisis and outrageous spending of the Obama administration has led us to that place.
There is mounting pressure to eliminate the ethanol tax subsidies, and even proponents are talking of cutting it by 9 cents from the current 45 cents a gallon, to possibly 36 cents a gallon for the subsidy.
Wednesday, June 9, 2010
Archer Daniels Midland (NYSE:ADM) Ethanol Push
Archer Daniels Midland (NYSE:ADM) is attempting to use the negative sentiment against oil companies at this time as a result of the Gulf spill to push their ethanol agenda of increasing the mix of ethanol and gasoline to 12 percent to run in cars.
This isn't because they care about alternative energy, as corn-based ethanol is harsh and hard on the environment, rather it's because of the drop in price of corn which will generate better earnings because of higher margins.
To that end they're pressing the Environmental Protection Agency to make the increased change to benefit themselves solely by selling more corn.
Meat producers are strongly resisting ethanol subsidies and other measures like this as it puts strain on their margins because of the ethanol industry being artificially propped up by the government.
I agree with the meat industry that ethanol subsidies should be completely abandoned and the industry should be left to stand or fall on its own, like it should have been all along.
With ethanol causing all sorts of problems for small engines and lack of evidence as to how hard it is on some cars, it would be foolish and irresponsible to allow this increase in ethanol-gasoline blend at this time, or any time in the future.
Let people decide if they want to buy ethanol to run their vehicles, not anyone else.
This isn't because they care about alternative energy, as corn-based ethanol is harsh and hard on the environment, rather it's because of the drop in price of corn which will generate better earnings because of higher margins.
To that end they're pressing the Environmental Protection Agency to make the increased change to benefit themselves solely by selling more corn.
Meat producers are strongly resisting ethanol subsidies and other measures like this as it puts strain on their margins because of the ethanol industry being artificially propped up by the government.
I agree with the meat industry that ethanol subsidies should be completely abandoned and the industry should be left to stand or fall on its own, like it should have been all along.
With ethanol causing all sorts of problems for small engines and lack of evidence as to how hard it is on some cars, it would be foolish and irresponsible to allow this increase in ethanol-gasoline blend at this time, or any time in the future.
Let people decide if they want to buy ethanol to run their vehicles, not anyone else.
Wednesday, May 5, 2010
Archer Daniels Midland (NYSE:ADM) To Grow Through Acquisitions
Archer Daniels Midland (NYSE:ADM) said after their quarterly report yesterday that their expansion plans are primarily to grow through mergers or acquisitions.
CFO Steven Mills said that's the key reason for maintaining a strong balance sheet.
This implies that organic growth isn't going to happen and they may be maxed out there.
Third-quarter profits for ADM missed analysts' estimates because of a decline in prices of starches and sweeteners.
The rest of the year looks tough for the company as well, with prices of corn syrup and ethanol expected to continue dropping.
CFO Steven Mills said that's the key reason for maintaining a strong balance sheet.
This implies that organic growth isn't going to happen and they may be maxed out there.
Third-quarter profits for ADM missed analysts' estimates because of a decline in prices of starches and sweeteners.
The rest of the year looks tough for the company as well, with prices of corn syrup and ethanol expected to continue dropping.
Tuesday, January 27, 2009
Commodities | Cellulosic Ethanol the Answer?
Is cellulosic ethanol the answer to the alleged energy crisis? I don't think so. We already know ethanol made from corn has so many downsides that the idea of continuing to produce it, or even having industry based upon it is fooish at best, and reckless at worst.
Already the ethanol industry is self destructing as producers are falling by the wayside, as the news lets us know.
Ethynol stocks are a joke, and companies are all teetering on bankruptcy, if they aren't bankrupt already.
Power equipment like snowmobiles and chainsaws are being decimated by E10, and repair shops are full from the broken down machinery.
Stocks related to ethanol are also being crushed, and all the marketing schemes in the world aren't going to change that reality. Ethanol as an investment sucks, and there's no other way to put it.
As far as cellulosic ethanol goes, it's just another pipe dream that will fall along the wayside, as billions in taxpayers dollars are wasted on another ill advised biofuel obsession.
What cellulosic ethanol is made of is material that is in the majority of plant matter, which is the reason there was so much news on the subject, because it provides a unlimited amount of resources for the fuel.
Plant matter like rice straw, corn stalks, switch grass, wood chips and wheat are part of what could be used to make the biofuel.
The problem with cellulosic ethanol is the technology doesn't exist to mass produce it, and it will be an extremely expensive process to develop, making it less price friendly for consumers.
As the news of the ethanol debacle continues to come forth, we're finding more and more that the supposed bridge between corn ethanol and cellulosic ethanol is simply a myth. It's being used by those with vested interest in continuing to obtain funds from taxpayers for their pet projects to keep them going.
Even the former chair of the House Ag Committe in the USA admitted accidently that he doubts cellulosic ethanol will ever take off as a viable biofuel. So with corn ethanol being considered more and more dubious as a legitimate source of fuel and energy, it may be past time to shut down the ill advised investment and turn to other research and experiment to find real solutions to future energy needs.
Another practical problem with cellulosic ethanol is its difficulty in breaking down in contrast to corn ethanol. The reason is because starch in corn ethanol is much easier to break down and much cheaper to produce.
The truth is that there would be no ethanol producers, ethanol companies, ethanol stocks or ethanol investment if there wasn't the misguided "Renewable Fuel Standard" of the 2007 Energy Act, without which biodiesel and cellulosic ethanol and corn ethanol would have long faded away, and news of it would be absent.
Unfortunately, mainstream media loves ethanol in all its forms, and continues to ignorantly report on it as if it's the answer to energy and fuel problems. In reality the process and inputs are more of a problem that the solution it's trying to become.
Even politcians like those in Missouri are under fire for investing in ethanol companies to benefit from the tax supported industry. Sarah Steelman is bravely fighting not allowing them to profit from the windfall, as in the case of Show Me Ethanol.
This is ridiculous that in what would be considered insider trading and illegal in the private sector could be allowed in the public sector.
We hear about the scientific side of things in order to justify the money for research for ethanol. For example, with cellulosic ethanol, they say researchers are working on enzymes so they more less expensively produce the potential fuel.
The problem is that's a bunch of nonsense. It's meaningless. Researchers are working on it? What does that mean? It means there's no solution and its a bunch of smoke and mirrors as to its potential.
All of this is a governmental marketing scheme for ethanol, and it's ignorant. Try to use news outlets to do there marketing as they do, the government knows that the ethanol industry in general, and the cellulosic industry in particular, has no future. It's not going to happen.
The only people benefitting from this are the producers, investors, companies and repair shops, who are filled with snowmobiles, chainsaws and generators from the ethanol caused break downs.
One good thing about it all is those ethanol companies and investors thinking they were going to make a huge profit at the expense of taxpayers and users of the faulty biofuel, are now finding themselves losing a ton of money from the socialist program.
It doesn't matter what type of ethanol is being touted in the news, it isn't even a part of the answer going forward. Have all the conferences you want and strategy meetings, it doesn't work, and it's becoming more and more obvious the longer we're in it.
Before this debacle is over, we're going to see billions of taxpayers money flushed down the ethanol biofuel drain, as the mandate to produce 36 billion gallons of biofuel by 2022 will result in outrageous actions to attempt to make it happen, unless the 2007 Act mandate is rescinded; which it will have to be.
The mandate requires 15 billion gallons of biofuel from corn, and 2 billion from cellulosic sources. The news is that's not even going to be close to being able to be achieved.
Almost everyone concurs that to achieve the levels mandated by law, the tax credits to the companies involved would have to be jacked up to much higher levels to make it even close to being possible.
What's the conclusion? Drop the program altogether. It's absolutely unattainable, and to continue on the course is reckless.
Not only is corn ethanol not the answer, but cellulosic ethanol is even less of an answer. It's far past time to simply acknowledge that reality.
Already the ethanol industry is self destructing as producers are falling by the wayside, as the news lets us know.
Ethynol stocks are a joke, and companies are all teetering on bankruptcy, if they aren't bankrupt already.
Power equipment like snowmobiles and chainsaws are being decimated by E10, and repair shops are full from the broken down machinery.
Stocks related to ethanol are also being crushed, and all the marketing schemes in the world aren't going to change that reality. Ethanol as an investment sucks, and there's no other way to put it.
As far as cellulosic ethanol goes, it's just another pipe dream that will fall along the wayside, as billions in taxpayers dollars are wasted on another ill advised biofuel obsession.
What cellulosic ethanol is made of is material that is in the majority of plant matter, which is the reason there was so much news on the subject, because it provides a unlimited amount of resources for the fuel.
Plant matter like rice straw, corn stalks, switch grass, wood chips and wheat are part of what could be used to make the biofuel.
The problem with cellulosic ethanol is the technology doesn't exist to mass produce it, and it will be an extremely expensive process to develop, making it less price friendly for consumers.
As the news of the ethanol debacle continues to come forth, we're finding more and more that the supposed bridge between corn ethanol and cellulosic ethanol is simply a myth. It's being used by those with vested interest in continuing to obtain funds from taxpayers for their pet projects to keep them going.
Even the former chair of the House Ag Committe in the USA admitted accidently that he doubts cellulosic ethanol will ever take off as a viable biofuel. So with corn ethanol being considered more and more dubious as a legitimate source of fuel and energy, it may be past time to shut down the ill advised investment and turn to other research and experiment to find real solutions to future energy needs.
Another practical problem with cellulosic ethanol is its difficulty in breaking down in contrast to corn ethanol. The reason is because starch in corn ethanol is much easier to break down and much cheaper to produce.
The truth is that there would be no ethanol producers, ethanol companies, ethanol stocks or ethanol investment if there wasn't the misguided "Renewable Fuel Standard" of the 2007 Energy Act, without which biodiesel and cellulosic ethanol and corn ethanol would have long faded away, and news of it would be absent.
Unfortunately, mainstream media loves ethanol in all its forms, and continues to ignorantly report on it as if it's the answer to energy and fuel problems. In reality the process and inputs are more of a problem that the solution it's trying to become.
Even politcians like those in Missouri are under fire for investing in ethanol companies to benefit from the tax supported industry. Sarah Steelman is bravely fighting not allowing them to profit from the windfall, as in the case of Show Me Ethanol.
This is ridiculous that in what would be considered insider trading and illegal in the private sector could be allowed in the public sector.
We hear about the scientific side of things in order to justify the money for research for ethanol. For example, with cellulosic ethanol, they say researchers are working on enzymes so they more less expensively produce the potential fuel.
The problem is that's a bunch of nonsense. It's meaningless. Researchers are working on it? What does that mean? It means there's no solution and its a bunch of smoke and mirrors as to its potential.
All of this is a governmental marketing scheme for ethanol, and it's ignorant. Try to use news outlets to do there marketing as they do, the government knows that the ethanol industry in general, and the cellulosic industry in particular, has no future. It's not going to happen.
The only people benefitting from this are the producers, investors, companies and repair shops, who are filled with snowmobiles, chainsaws and generators from the ethanol caused break downs.
One good thing about it all is those ethanol companies and investors thinking they were going to make a huge profit at the expense of taxpayers and users of the faulty biofuel, are now finding themselves losing a ton of money from the socialist program.
It doesn't matter what type of ethanol is being touted in the news, it isn't even a part of the answer going forward. Have all the conferences you want and strategy meetings, it doesn't work, and it's becoming more and more obvious the longer we're in it.
Before this debacle is over, we're going to see billions of taxpayers money flushed down the ethanol biofuel drain, as the mandate to produce 36 billion gallons of biofuel by 2022 will result in outrageous actions to attempt to make it happen, unless the 2007 Act mandate is rescinded; which it will have to be.
The mandate requires 15 billion gallons of biofuel from corn, and 2 billion from cellulosic sources. The news is that's not even going to be close to being able to be achieved.
Almost everyone concurs that to achieve the levels mandated by law, the tax credits to the companies involved would have to be jacked up to much higher levels to make it even close to being possible.
What's the conclusion? Drop the program altogether. It's absolutely unattainable, and to continue on the course is reckless.
Not only is corn ethanol not the answer, but cellulosic ethanol is even less of an answer. It's far past time to simply acknowledge that reality.
Subscribe to:
Posts (Atom)