GLG News by Fertilizer Purchasers

Philip CorzineGeneral ManagerSouth American Soy LLC

Remove US tariffs on ethanol and watch the capital flow

August 30, 2006

Analysis of:Bajaj Hindusthan Plans $500 Million Sugar Investments in Brazil | www.bloomberg.com

This $500M investment in the Brazilian sugar industry is unlikely to have a current affect on the alternative fuels industry, but does show the potential for this type of activity to increase due to:

-Cost of production advantages

-Nearly elastic feedstock supply

 

Philip CorzineGeneral ManagerSouth American Soy LLC

Chinese agriculture needs to evolve to protect drinking water

August 30, 2006

Analysis of:China's Water Resources Become Stretched | online.wsj.com

Given that Chinese agriculture is a likely source of the groundwater pollution in that country, their production systems may need to evolve.  Areas of concern might be:
1) Scale
2) Application Technology
3) Training

Philip CorzineGeneral ManagerSouth American Soy LLC

Prices, and price relationships for ethanol likely to continue to change

August 21, 2006

Analysis of:ETHANOL SUDDENLY PLENTIFUL; COULD SPUR GASOHOL RESURGENCE | www.opisnet.com

-Ethanol prices will, and already are coming down, due to new production coming online. New plants will mean more competition for existing demand.

-These lower ethanol prices may tend to increase demand even more, as ethanol becomes a cheaper pure-substitute for gasoline at current crude prices.

-The ethanol industry is exhibiting growing pains as it increases in size so much, so fast. The industry will have more S&D hiccups, such as those evidenced by the price run-ups earlier this spring. Although those issues tend to dampen demand, they should ease as the industry solidifies and matures in the next 24 months.

-Ethanol does not mirror fuel prices. From ethanol's perspective, this is a good thing for now, with the current high prices for crude. However, it could just as easily (and probably will at some point) become a bad thing for ethanol, if the price of ethanol's feedstock increases production costs, at the same time that higher production levels reduce profit margins.

Philip CorzineGeneral ManagerSouth American Soy LLC

Why Aren't Petroleum Refiners More Excited About Ethanol?

August 11, 2006

Analysis of:Refiners and Ethanol | www.thehj.com

I think that it's impossible for anyone on the outside, to understand why petroleum refiners aren't more aggressively investing in ethanol infrastructure. Following however, are some thoughts, knowledge and tidbits of history and that may, or may not, shed a little more light on this situation. 

-Long-term bad blood between big oil and ethanol
-Ethanol is a fundamentally different kind of business
-Concerns over whether current profitability in ethanol will continue
-Difficulties in getting plants built quickly enough

Philip CorzineGeneral ManagerSouth American Soy LLC

Corn price volatility a risk factor for new bio-based products

August 9, 2006

Analysis of:US: Corn Plastic to the Rescue | www.corpwatch.org

Two significant questions arise from this article:

1 - Is corn plastic really green?

2 - Is there enough corn for both this new product and ethanol?

Philip CorzineGeneral ManagerSouth American Soy LLC

Why can't the US produce ethanol from sugar? Price and Productivity

August 9, 2006

Analysis of:THE ECONOMIC FEASIBILITY OF ETHANOL PRODUCTION | www.usda.gov

Price and Productivity are the main reasons the US can't create sugar-based ethanol on the same scale, and with the same level of efficiency, that Brazil is doing.

Philip CorzineGeneral ManagerSouth American Soy LLC

Price rations supplies - How much are you willing to pay?

August 4, 2006

Analysis of:Asia: U.S Has Enough Corn For Fuel, Export Demand | www.cattlenetwork.com

This article attempts to paint a picture of everybody getting everything they want, and this may well be true in the long-run.

However in the short run, expect some high volatility in corn prices over the next two years as the market attempts to ration supplies between the livestock industry, the growing ethanol industry, and foreign buyers.

The question isn't will there be enough--the question is how much will it cost you.

Philip CorzineGeneral ManagerSouth American Soy LLC

Ethanol gold rush creates unintended consquences

August 4, 2006

Analysis of:For Good or Ill, Boom in Ethanol Reshapes Economy of Heartland | www.theledger.com

The boom in ethanol production will create unintended consequences such as:
-higher feed costs for livestock, possibly leading to higher food costs
-loss of export markets due to higher prices
-significant changes in crop rotations
-more use of fragile farmlands    

Philip CorzineGeneral ManagerSouth American Soy LLC

Cargills pledge is environmentally positive and production neutral, as long as it isn't expanded

August 3, 2006

Analysis of:Cargill Stops Brazilian Soybean Buys From Deforested Land | online.wsj.com

Cargill’s pledge to not buy soy produced on illegally deforested lands in the Amazon is a positive public relations move, but:

With a biofuels boom, doesn't worldwide production of commodities needs to increase, not be restricted?

How will this pledge affect Brazil's production potential?

Why is Cargill at the center of this issue?

Philip CorzineGeneral ManagerSouth American Soy LLC

Remember the bio part of biofuels

August 3, 2006

Analysis of:A Competitor For Ethanol? | www.forbes.com

- Growing investment in biofuels may yield both opportunities and challenges

- Keep the bio portion of biofuels in mind when assessing changes in this industry

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