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Adams, NE | as a guy trading the crush back then (and still today). $7 corn and $2.90 ethanol was not near as painful as $4.00 corn and $1.50 ethanol.
What got alot of end users is trouble is the belief that you have to be long corn if you are an end-user. This belief works well when corn goes straight up, but is very painful when the market goes straight down. VeraSun was not watching their "risk to cash in the event of..." and panicked and then panicked some more when cash reserves where getting low. When they blew out of their short corn hedges, they should have sold cash ethanol. If they do that, Valero/others do not own their assets today.
ADM, Cargill, Bunge...did not have much pain during $7.00 corn as they were managing a crush for their operations and watched their risk to cash. Just ask Ray. | |
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