GLG News by Mr. Philip Corzine, General Manager
GLG News is now G+ Insights
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GMO's riding the biofuel train too.
October 7, 2007
Government allows import of GM seed edible oil | www.business-standard.com
GMO products will likely ride the biofuel train into other formerly closed markets, as global supplies of corn and beans shrink due to biofuel consumption, and non-GMO alternatives disappear.
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Slowdowns and consolidations ahead for ethanol, but pain today will create more profits tomorrow.
October 4, 2007
Ethanol Boom Is Running Out of Gas | online.wsj.com
Ethanol is headed for a slowdown and consolidations, but will emerge stronger and more efficient. Cash corn near $3.05 and ethanol near $1.58 per gallon leaves a profit margin of only a few cents per bushel. Corn prices will fall as ethanol plants slow consumption, but weather and currency issues for farmers in other countries has complicated the price picture.
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Economics working against soy-based biodiesel
September 27, 2007
Biodiesel boom heads to Wall Street | money.cnn.com
With current prices for soybeans, biodiesel's primary feedstock, its economic viability is questionable. With soybean oil selling for near $0.40 per pound, costs to produce soy-based biodiesel are running $3.20-$3.30 per gallon, at or slightly above current prices for diesel of $3.00-$3.10. The Federal Subsidy for biodiesel blenders of up to $1.00 per gallon appears to be the only thing keeping soy-biodiesel viable, at diesel prices that are almost 50% above those of one year ago.
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Brazil's Addition Of Ethanol Subsidies To Their WTO Appeal Raises The Stakes For US Agriculture
September 19, 2007
Brazil Wants Probe of U.S. Farm Aid | www.forbes.com
Brazil’s complaint, originally filed in July, now includes a challenge on the payments for “energy subsidies”—ie: ethanol’s $0.51 per gallon subsidy, and the biodiesel blending credit. The US says it considers those “industrial” subsidies, and not a part of this WTO discussion Brazil has already won a WTO case against US Cotton Programs, in 2004 A potential, still unreleased WTO Compliance Panel report is said to show that the US is still in violation of the 2004 Cotton ruling
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ADM, Bunge and others, will face many challanges in the Brazilian sugar sector.
September 14, 2007
Ethanol Giants Struggle To Crack Brazil Market | online.wsj.com
Multinationals like ADM will enter the Brazilian sector, but should they do it now? Overoptimism in Brazil's sugar sector will lead to overpricing of assets The Brazilian sugar sector may be headed for a correction.
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September 7, 2007
U.S. Ag Secretary Wants Lower Farm Subsidy Limit | www.soyatech.com
It appears that Congress may, yet again, renew many of the provisions in the 2002 program…pushing the issue of true reforms to be played out in the courts of the WTO. The US will eventually be forced to "level the playing field" on these issues, and it may be forced on the farm sector at a time when is will be much harder to swallow. Drop Direct Payments, they serve no purpose Drop Marketing Loans & LDP's, they disrupt market signals and rotations Put More Money into Counter-Cyclical Payments, they provide income stability to ag producers, and the entire ag sector, but don’t add much market signal distortion. Forget About Payment Limitations, the US needs a stable and adequate supply of food and bio-feedstocks and large commercial farms are the best suited to accomplish that. Don’t penalize farms for becoming more efficient.
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Redistribution of agricultural lands is a continuing challenge for Brazilian agriculture.
August 31, 2007
Brazil's Landless Movement faces new agrarian reform | www.checkbiotech.org
Brazil's landless social action movement remains a risk for both domestic and international agricultural businesses in Brazil. The MST's unhappiness with their efforts, to date, to work politically through the Lula administration, creates the risk of additional social actions by the organization. The MST's social and political goals for Brazil seem to aligning more closely with those of Greenpeace, and the combination of the two group's would be of concern to agricultural businesses in Brazil.
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Farm machinery makers have to "follow their customers" to stay competitive
August 14, 2007
Why Deere Is Weeding Out Dealers Even As Farms Boom | online.wsj.com
Toying with dealer-customer relationships is always a tricky matter, but as agricultural producers in the US get bigger, makers and sellers of farm machinery have to evolve, in order to be able to serve their customer's changing needs. Farm numbers falling Numbers of farms in the US continues to fall, down 43% in IL since 1970. Dramatically increasing levels of technology The level of technology employed in current farm machinery is extremely high, with sub-meter yield and moisture mapping becoming nearly standard equipment on combine harvesters.
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Higher nitrogen prices (and higher soybean prices) will slow, or stop, growth in corn acres in 2008
August 13, 2007
Impact of Rising Natural Gas Prices on U.S. Ammonia Supply | www.ers.usda.gov
NH3, or Anhydrous Ammonia, is the primary source, for nitrogen, a key input for farmers in the production of corn. Domestic production of NH3 is down by 44% over past 4 years due to lower margins. Imports are up 115 % over the same period. Prices paid by farmers have increased by 129% over that same 5 year period. There his unused domestic production capacity sufficient to supply the nitrogen requirements for an additional 10M acres of corn, but current prices for natural gas (the feedstock for NH3) make it uncompetitive to bring this production capacity into play....so new corn acres will have to get their nitrogen from imported NH3...making it likely that NH3 prices will continue to increase. Bottom line...higher prices for NH3 will help to level the ROI playing field for the corn-vs-soy calculations for the 2008 crop.
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Potential is there, but pushing new use's is a difficult process with low rates of success
August 13, 2007
Cooking Up More Uses for the Leftovers for Biofuel Production | www.nytimes.com
The potential to increase revenues by finding, or creating new uses for by-products is real, and potentially significant. However, past experiences indicate that trying to "push" new products onto the market is much harder than letting demand "pull" them in...and is made even more difficult by the unpredictability of the cost of the feedstock.
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Soy complex has potential--Brazilian plantings a key factor.
July 30, 2007
Grain Price Outlook: Soybeans-What will South American Do? | www.farmdoc.uiuc.edu
64.1M acres of soybeans planted in US in 2007, likely creating the second smallest harvest in 8 years. - - - - Average farm prices for soybeans are projected to increase by over $1.00/bu. in the next year. - - - - - Future price movements will be highly volatile, influenced heavily by size of the crop planted in South America - - - - - Biodiesel beginning to have an impact on soybean crush, but watch Chinese hog deaths. - - - - - Brazilian production won't expand as much as anticipated earlier due to the Real and higher costs. - - - - - Farmers are facing record-wide basis levels for soybeans.
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Don't blame corn for higher food prices....yet.
July 13, 2007
Grain prices not at fault for food costs | www.kansas.com
The cost of corn, is not the significant driver in increases in food prices. Corn represents just $.15-$.26 per pound of meet costs A box of corn flakes contains about $.03 of corn Higher milk prices are not connected to higher corn prices.
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July 9, 2007
Fuels from Wood and Waste not Food and Haste | www.cleantechblog.com
The United State's production subsidy and import tariff needs a sunset date. --- US farmers are not abusing land to produce ethanol feedstocks --- Fertilizer use is up, but that's a good thing --- Do subsidize the installation of E85 pumps in the US --- Cellulosic ethanol is the future, but US can't forget to dance with who brought them to the dance.
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Soy loses ground in US to corn, so all eyes now on Brazil
July 3, 2007
Corn's-a-Poppin' | blogs.wsj.com
>The (toal acreage) pie can't get bigger in the US > Soybeans are driving the CBOT now > Brazilian farmers CAN expand planted area > Area planted to soy in Brazil was DOWN by over 6% in the 06/07 crop > Look for increases in soybean area in the southern states, in areas where sugarcane isn't an option > Increases in planted area in the northern expansion areas will be limited by the Real, and by lack of credit.
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ADM makes a smart move into Brazilian sugar
June 28, 2007
Archer Daniels Midland to Enter Brazil Sugar-Cane Ethanol Market | energy.seekingalpha.com
This appears to be a good move for ADM, both from a protective, and a proactive, viewpoint. > This could be viewed as a hedge against changes in the import tariff > ADM has operational history in Brazilian agriculture > This move may not be viewed in a positive by US corn growers > Brazilian sugarmills likely face some rough times in the near term
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Ethanol euphoria appropriate, if focused on cellulosic ethanol rather than grain
February 2, 2007
Ethanol euphoria is out of place | www.timesunion.com
This article makes a couple of good points, but gets off-track, in my opinion, when the author delves into the long-term effects of the ethanol boom on the agricultural economy.
> Agreed, the Brazilian ethanol industry can't be used to model where the US industry can go.
> Agreed, grain based (corn) ethanol is not viable to achieve the goals laid out by the Bush Administration
> However, commercial cellulosic based ethanol is not that far away
> Also I think that the US ethanol industry will support cellulosic, if they can fully participate
> I also believe that harvesting of cellulosic production can occur without damaging farms and soils
> Yes, food price spikes will occur, but should be temporary, not a perminent increase. -
Soybean prices have potential, but could move either way after March reports
January 5, 2007
Soybeans Poised to Make Investors Rich in 2007 - Commodities Expert Predicts | www.soyatech.com
Soybean prices do have significant upside potential over the next 12 months, but it may be too early to be making bets on the if, when and how much.
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Is the top already off new ethanol expansion--corn prices the key
January 3, 2007
Ethanol Update - Will Current Corn Prices Halt the Boom (page 6) | www.econ.iastate.edu
One question of this new future for the US ag sector has been answered--corn prices have already gone up...up almost 75% in just a few months. Now the question is does the ethanol industry still have the momentum to go where it seemed to be headed last fall in terms of potential …or is the top already off of the expansion for ethanol?
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US Ethanol Faces Challanges, But Brazilian Model May Offer Solutions
December 19, 2006
No easy answers to ethanol dilemma | www.journalstar.com
Mr. Guebert does a good job of continuing to point out what many US ethanol proponents continue to be turning a deaf ear to…there may just not enough corn to keep all of these "new" plants going next year. On the other hand, I think the article misses the point in his comparison to Brazil.
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Alt Energy No Myth, IF R&D continues to grow
December 19, 2006
The Myth Of Alternative Energy | www.countercurrents.org
While it seems that this author has offered a fairly shallow view of the alternative situation and offered it up with a far more serious tone than it deserves….there is often at least a little sound logic in even the most poorly formulated arguments, and I believe that this hold true for this piece.
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