REX American Resources (REX)

[value1008]

REX reports results tomorrow.... Will be very interesting to see what EPS they post for Q4-- given the severity of Jan.'s drop in ethanol prices, i guesstimate somewhere around 1.90 EPS, depending on how much a price gain they benefited from in DDGs (given the time lags in this industry, that price rebound may not come in for REX until the present Q1).

For REX's stockprice, so much will depend on the kind of guidance CEO Rose gives tomorrow in the conf call and maybe in the earnings PR.

If oil is still headed lower in price, i don't consider ethanol plays a "buy" yet, but at some point it will feel like oil is bottoming and then, if one believes the recovery won't be too gradual/extended, ethanol players will likely be a good buy.


http://www.platts.com/latest-news#Agriculture

Chicago Argo ethanol assessment rises to two-month high


Houston (Platts)--23Mar2015/400 pm EDT/2000 GMT

The Chicago Argo ethanol assessment Monday rose to its highest level in more than two months as prices continued to recover from nine-year lows in January.

The assessment ticked up 2.75 cents to $1.4870/gal, the highest level since January 5, when it was at $1.54225/gal.

In the Platts Market On Close assessment, 30,000 barrels of Chicago Argo ethanol for March 28-April 7 delivery changed hands at levels starting at $1.49/gal and ending at $1.4850/gal.

After moving up 98 cents, or 53.85%, in November, the Argo assessment tumbled in December, shedding $1.17/gal, or 41.79%. After opening the year with a $1.6145/gal assessment on January 2, ethanol tracked plunging gasoline prices lower.

US ethanol prices in recent weeks, however, have been boosted by rebounding gasoline prices alongside slightly tighter stockpiles and slowed production rates.

US ethanol production for the week ended March 13 was at 947,000 b/d, a far cry from the record 992,000 b/d set in the week ended December 19, Energy Information Administration data showed Wednesday.

Amid the lower production, stockpiles have declined 774,000 barrels to 20.82 million barrels from the three-year high of 21.594 million barrels hit in the week ended February 20.

The healthier returns in the spot market have helped boost production margins.

The estimated production margin for a typical US Midwest dry-mill ethanol plant for the week ended Friday moved up 4.72 cents, or 12.57%, to 42.25 cents/gal, a review of US Department of Agriculture and Platts data showed.

--Jordan Godwin, [e-mail]
--Edited by Richard Rubin, [e-mail]