I can't reply to private messages. I only have the basic membership Sorry.
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Following hook-up with Uniloc, Marathon becomes the latest NPE to explore commercialisation + licensing
link to article
That's just breaking down the amount (percentage) of revenue stream that must go into paying down the notes, based on the amount of revenue received, above the threshold amount.
The threshold amount is the $15M annual revenue stream.
What they're outlining aren't payments above and beyond what's owed, it's a payment schedule that based on revenue stream.
So
All Monetization Revenues received by the Issuer and any Subsidiary or deposited in the Cash Collateral Account shall be applied so that, subject to the Company’s retention of the Threshold Amount, 30% of Monetization Net Revenues are applied to the Note Obligations until paid in full
Translation: 30% of the revenue stream that exceeds the threshold amount of $15M (or $1.25M/month) must go into paying down the note obligations.
It then goes on the spell out additional modifiers to that 30%. Basically, they reduce the 30% until other debts (primarily the Medtronics obligation) are paid off. Or at least, that's how I interpret it, without spending a whole lot of time on it.
I estimate the interest rate to be about 30%+ plus the equity that was given.
If anyone was tracking the California terminal prices for ethanol, either from Progressive Fuels or another source, I need to fill in prices from when I was on vacation.
The dates I need the prices for are
July 31
Aug 3
Aug 4
Aug 5
Aug 6
Aug 7
Thanks in advance if you can provide some or all of those.
If it's from Progressive, the bid & ask would be appreciated. If it's from another source, whatever you have works :)
Hi Mortenm, I'll get back to you on this. Just got back from holidays
What are you using as a source for your information?
If it's BATS (the free data IH as well as a number of other websites provide) it's limited to the trades done on the BATS system. It doesn't include all the rest of the volume on the other exchanges. The same is true for the data posted on the Nasdaq site for normal market hours.
Right now for example, the Nasdaq MARA page shows the 5 latest trades, how ever my trading platform shows two additional trades over the same time period that are not showing on the Nasdaq "Last Five Real-Time Trades" stream.
My trading platform shows yesterday's High/Low as $2.95/$2.81.
Using the basic PEIX formula, I have the margin @ $0.531 for Q2. Keep in mind that doesn't factor in the increase in corn oil production as of early May.
The big unknown in all this is the corn basis. The PEIX formula uses a default value of $1.28/bushel of corn. However the basis for Q1, due to lower rail transportation costs, was $0.93. That translated into an extra $0.125 per gallon above what the default formula predicted.
The default value for co-products used by the PEIX formula is 30%. That actual value reported by PEIX for Q1 was 33.8%
For comparison sake, The PEIX formula predicted a margin of $0.358 for Q1.
Below is the data predicted for by averaging the Q1 daily reported prices for corn & ethanol, along with the value reported for the quarter by PEIX:
Ethanol $1.609 (NorCal Terminal) / $1.65 (PEIX average reported sale price)
Corn $ $3.849 (CBOT Near) / $3.88 (PEIX actual reported cost)
If I dump the PEIX reported numbers into the PEIX formula and adjust to the actual basis cost, I get
$1.65 - (($3.88 + $0.93) x (1-0.33.8))/2.8 = $0.513
At a margin of $0.513 they lost $4.7M, or approx. $0.10/gal (reported production for Q1 was 44.6M gallons).
By comparison, using the margin generated for Q2 by the default formula, and then factoring the additional corn oil production (I'm assuming a margin gain of $0.02/gal) I get $0.551.
If co-product return (in addition to the increase in corn oil) comes in near Q1 (33.8% instead of 30%), that should amount to around another 6.5 cents a gallon.
If the corn basis comes in as low as Q1, that could result in an additional $0.125/gal
Add those up and I come up with a possibe $0.741/gal. That's a possible increase of $0.228/gal. Assume 45M gallons of production and that's $10.26M better than Q1, or an approx net available to shareholders of around $5.5M or $0.22/share.
Note: This does not include any adjustments for Kinergy revenue. I have also kept tabs on the reported difference between the USDA plant price reported for Nebraska, and compared it to the Cal Terminal price. That difference was $0.251 for Q1, vs. $0.246 for Q2.
In my opinion, that's a best case scenario. On the other hand, if the above values come in at the mid-point between Q1 and the base PEIX assumptions, we're looking at around $0.114/gal (5.13M better than Q1) or slightly better than break-even. I suspect that barring any surprises, that should be a worse case scenario.
As for Q3 to date, yes, the numbers on the PEIX side are certainly not great (they're in the Q1 range so far). But remember they should be producing corn oil at all the plants any day now. That alone should increase the margins by somewhere around $0.04/gallon from before Madera and Columbia (not on line yet) were producing corn oil
As for Aventine? Who knows. It's all kind of a black hole. If they are coming in near the USDA predictive values for Illinois & Nebraska, they should be out-performing PEIX. Of course, that's before their massive debt-servicing costs, which is now part of the PEIX picture going forward.
The Q3 values I have to date are
PEIX $0.426 (basic formula, does not account for corn oil increase)
Nebraska $0.451(USDA plant).
Illinois $0.572 (USDA plant).
Remember, USDA does not include corn oil production in their numbers.
Hopefully I didn't make any math errors.
I'm going to recheck my numbers and respond in the morning.
13G filing
SCHEDULE 13G
Once shunned for oil, ethanol makes a return to U.S. rails
Sinking lease rates, weak crude prices and tough new safety measures for transporting oil by rail have spurred a resurgence in hauling ethanol on the U.S. rail network, as some train companies convert tank cars to carry more corn-based biofuels.
The trend emerged in the past six months and marks a shift in a years-long boom in transporting crude-by-rail after rail companies, such as Greenbrier and GATX, rushed to increase tank car capacity as the U.S. shale revolution took off five years ago.
Now, some rail car owners are cleaning out oil-carrying tank cars to carry corn-based ethanol which is blended into U.S. motor fuel.
It is not clear if this is the start of a long-term trend or how widespread the shift has been.
But experts and traders say several factors are behind their renewed appetite for ethanol: Crude rail volumes have plunged this year as it has become more economic to import crude by sea; lease rates are down over 70 percent in the past 18 months due to a surplus of car capacity and the crude rout has fuelled a recovery in demand for ethanol as more Americans take to the road.
New tank car safety standards announced in May after a series of fiery rail disasters in recent years may also be behind the trend.
"Two years ago, the ethanol guys were mad that all their cars were being taken away, and five years ago, it was only ethanol," Jeff Kerr, a senior editor at energy industry intelligence service Genscape, said.
"Now, ethanol guys are saying welcome home."
Tom Williamson, owner of Transportation Consultants, said he has helped broker several deals that included roughly 700 oil cars being pulled from oil and put into ethanol service in recent months.
The process includes an extensive cleaning of the cars and a full inspection, he said.
A U.S. ethanol trader said he has seen more cars become available since the crude price rout started nine months ago and lease rates have fallen.
MORE LENIENT, LOWER LEASE RATES
The U.S. rail network has also improved performance, allowing shippers to do more hauling without adding more cars.
New federal safety regulations for tank cars carrying fuel may also be behind the push. Rules on ethanol, which supporters say is less volatile than crude and is biodegradable, are more lenient than oil.
"It's certainly a factor in the switch, as leasing companies may be taking advantage of the longer lead time," Williamson said.
The ethanol industry has eight years to replace or modify the 28,000-tank-car fleet, three years longer than oil cars.
But another big driver has been the sharp drop in monthly lease rates for tank cars.
Long-term lease rates for the most common tank cars have plunged to as low as $700 a month, down from about $2,500 about 18 months ago. One physical trader who focuses on crude rail said he saw a 18-month lease for $850 a car.
The cost of taking cars off the rails - as much as $100 a month per car - also makes it more appealing to make the switch, industry sources said.
Source:
Once shunned for oil, ethanol makes a return to U.S. rails
More importantly, the west coast inventories finally show a significant drop. Still need to decline further (2.571M vs 2.1M range this time last year) , but they're the lowest they've been in 4 weeks, and the drop indicates demand is finally outpacing production. The low west coast prices over the past couple weeks probably curtailed imports from the midwest states significantly.
A little late to help the PEIX Q2 numbers, but if the drop in inventory continues, it should bode well for Q3.
I just checked to see if I could place an order - no problem. I'm in Canada and use Questrade.
Imperial Reports Red Chris Mine Receives Environmental Management Act (EMA) Permit
June 15, 2015
Imperial Reports Red Chris Mine Receives Environmental Management Act (EMA) Permit
Vancouver -- June 15, 2015 - Imperial Metals Corporation ("Imperial")(III-TSX) reports that an amended permit under the British Columbia Environmental Management Act (EMA) for the Red Chris mine was issued on June 12, 2015 by the Ministry of Environment to Red Chris Development Company Ltd. (Red Chris), a wholly owned subsidiary of Imperial. The amended EMA permit replaces the previously issued short term authorization. This permit allows the mine to discharge tailings into the tailings storage facility (TSF) and discharge water from the TSF subject to water quality guidelines.
Red Chris has worked closely with the Tahltan Central Council and the Ministry of Environment in regard to the terms and conditions of the permit. The amended EMA permit is an important milestone for Red Chris as it ensures the mine can operate on a continuous basis subject to the conditions of the permit.
Link to PR
"Finally, there are no jury trials in patent infringement cases in Germany."
Thank gawd.
Look to the left when composing a message and you'll see Image
Select that, then paste the link to the image you want to post, in the html code where it places your cursor. Note, the link must be to an image available online. Linking to the image location on your computer will not work.
If the image you want to post isn't available online, you can first use a site like tinypic or http://postimage.org/ to upload a copy of the image. If using postimage org (my personal fav), after you upload it, copy the "direct link" (the other versions won't work)
My apologies, this is the link for the 2010 amendment to the PSC, not the one I included in my previous post.
2010 Amendment
Dependent on the Ebola situation, I think it's possible (although not probable) that we see a spud date by early Q1. I base that comment on the recent remark in the latest 10-Q stating that it would take 6 months to ramp up to drilling:
We expect the Consortium will resume petroleum operations if the impediments to drilling are removed. The timing or outcome of these events is unknown. We estimate that a period of approximately six months from the resumption of operations will be necessary to enact all procedures and to enter into the necessary contracts prior to drilling. Accordingly, the commencement of drilling before the end of 2015 is extremely unlikely.
Of course, as alluded to in what we know of the African Intelligence article, one possibility to circumnavigate the persistence of Ebola would be to relocate the base of operations to a port outside of Guinea. I'm not entirely convinced, however, that the Gov't of Guinea would be all that supportive of that move. Nor, based on the past track record of African Intelligence, do I put a lot of stock in what they have to say.
The SEC investigation, while it could result in a fine to HDY, should have no consequence on drilling plans. It was the DOJ investigation that was my main cause of concern. Personally I think given the outcome of the DOJ investigation, that the SEC is not likely to result in anything at this point.
As for concession relinquishments, as it stands now, that's spelled out pretty clearly in the PSC. While the following summary can be found in the most recent 10-Q ...
The continued absence of petroleum operations affects the value of the Concession as the second exploration period of the Concession ends in September 2016. The extension of the second exploration period (September 2013-2016) may be further extended for one year beyond September 2016 to allow the completion of a well in process and for up to two years to allow the completion of an appraisal of any discovery made.
An exploration well is required to be commenced by the end of September 2016 and reach a minimum depth of 2,500 meters below seabed to satisfy the September 2013-2016 work requirement. Failure to comply with the drilling and other obligations of the PSC could subject us to risk of loss of the Concession, and continued delays could affect adversely the ability to drill more than one well and the attractiveness of the Concession and our business to prospective industry participants and financing sources.
... the 2006 PSC and 2010 Amendment provide more clarity. The following is from the 2006 PSC:
ARTICLE 3: DURATION OF THE CONTRACT
3.1
This Contract shall consist of an exploration period and, in respect of each Commercial Discovery, an exploitation period.
3.2
The exploration period consists of a First Exploration Period and a Second Exploration Period. The First Exploration Period shall be for two Contract Years and the Second Exploration Period shall be for four Contract years.
3.3
The Contractor shall begin performing the Petroleum exploration operations within two (2) months after the Effective Date.
3.4
The Contractor shall be able to obtain ipso jure, the renewal of the First Exploration Period twice for an additional exploration period of one (1) Contract Year each time. For each renewal, the Contractor shall notify the Minister at least two (2) months prior to the expiry of such exploration period.
3.5
The Contractor is authorized to conduct First Exploration Period operations for the duration of this contract upon notification to the Minister two (2) months before the commencement of such work.
3.6
During the First Exploration Period, the Contractor may perform work obligations towards the fulfillment of the Second Exploration Period.
3.7
In order to enable the Contractor to complete its work, the Minister will grant an extension to the Second Exploration Period, for a period of four (4) years, upon notification made by the contractor at least two (2) months prior to expiry of the Second Exploration Period.
Upon a Petroleum discovery made during the Second Exploration Period and the remaining time is insufficient to allow the Contractor to undertake the appraisal works of such discovery, the Minister will grant an extension of two (2) years upon notification made by the Contractor at least two (2) months prior to expiry of the Second Exploration Period.
3.8
Subject to the provisions of Article 24 below, the Exploration Period shall expire two years after the end of the Second Exploration Period with the exception of the Exploitation Area(s) as defined in Article 7 below except in the event of surrender of the Contract Area as defined in Article 5.1 below in which case this Contract will not expire.
3.9
Following the determination by the Contractor of the commerciality of a discovery, the Exploitation Period with respect to that Commercial Discovery shall commence upon the date of adoption of the development plan in accordance with the provisions of Article 7 below and shall expire twenty-five (25) years following that date.
However, where the Contractor at the expiry of the Exploitation Period considers and provides the Minister with justifications, that the field is able to continue to produce commercially, said Exploitation Period shall be extended twice for ten (10) years each.
3.10
The Contractor shall have the right to drill more wells in the Exploitation Area during the Exploitation Period and where there are more than one Commercial Discovery, each of them shall have a different Exploitation Period.
Link to the full 2006 PSC
Here are the pertinent changes to Article 3 contained in the 2010 amendment:
Article 3: Duration of the Contract
Article 3.2 shall be deleted in its entirety and replaced by the following:
3.2 The exploration period consists of a First Exploration Period and its renewal in a Second exploration Period. The First Exploration Period shall be deemed to last four (4) contract years and shall expire on 21 September 2010.
The Second Exploration Period shall last three (3) years, renewable once for the same duration. It is specified that no renewal or extension shall be granted to the Contractor unless the latter fulfils its work and expenditure obligations for the preceding period.
Article 3.7 shall be deleted in its entirety and replaced by the following:
3.7 In order to enable the Contractor to continue and complete any drilling work already started, the Minister will grant an extension of the Second Exploration Period renewable for a period of maximum One (1) year provided the Contractor has applied for such extension at least two (2) months prior to the expiry of the second exploration Period.
In the case of a Petroleum Discovery during the second exploration Period renewable and if the time left is insufficient to enable the Contractor to carry out the appraisal works of the said discovery, the Minister will grant an extension of the said period for up to two (2) years, provided the Contractor has applied for such extension at least two (2) months prior to expiry of the Second Exploration Period. During such extension, the Contractor shall not undertake any operations other than those directly associated with the appraisal of the said discovery.
Article 3.8 shall be deleted in its entirety.
The final sentence of Article 3.9 shall be modified in order to provide for only one extension of ten (10) years of any Exploitation Period.
The French version of Article 3.10 of the PSC shall be conformed to the English version by inserting, before the last clause, the phrase “when there is more than one Commercial Discovery”.
Link to the 2010 Amendment
I do think a distinct possibility exists, however, for Tullow to negotiate an extension on the September 2016 second exploration period termination date on the grounds of the Ebola crisis. Any announcement to that effect will definitely give Hyper a shot in the arm.
Weekly Petroleum Status Report
Then open the Table 5 excel spreadshet: Stocks of Total Motor Gasoline and Fuel Ethanol by PAD District
Click on the Data 1 tab. The column in question is at the far right of the spreadsheet: Weekly West Coast (PADD 5) Ending Stocks of Fuel Ethanol (Thousand Barrels). The data goes back to 2010, when they first started tracking ethanol.
West Coast Ethanol Stocks
While the overall Us numbers reflect at least some contraction, West Coast inventories remain persistently high through the month of May
May 30, 2014: 1.897M barrels
May 29, 2015: 2.591M berrels
By the week: (thousand barrels)
May 30, 2014 1897
Jun 06, 2014 2070
Jun 13, 2014 2000
Jun 20, 2014 2105
Jun 27, 2014 1969
Jul 04, 2014 1924
Jul 11, 2014 2015
Jul 18, 2014 1917
Jul 25, 2014 1847
Aug 01, 2014 2023
Aug 08, 2014 2127
Aug 15, 2014 2165
Aug 22, 2014 2081
Aug 29, 2014 1939
Sep 05, 2014 2117
Sep 12, 2014 2318
Sep 19, 2014 2229
Sep 26, 2014 2258
Oct 03, 2014 2447
Oct 10, 2014 2335
Oct 17, 2014 2279
Oct 24, 2014 2355
Oct 31, 2014 2275
Nov 07, 2014 2376
Nov 14, 2014 2230
Nov 21, 2014 2226
Nov 28, 2014 2204
Dec 05, 2014 2120
Dec 12, 2014 2111
Dec 19, 2014 2133
Dec 26, 2014 2108
Jan 02, 2015 2213
Jan 09, 2015 2437
Jan 16, 2015 2305
Jan 23, 2015 2317
Jan 30, 2015 2435
Feb 06, 2015 2404
Feb 13, 2015 2355
Feb 20, 2015 2507
Feb 27, 2015 2527
Mar 06, 2015 2590
Mar 13, 2015 2603
Mar 20, 2015 2633
Mar 27, 2015 2445
Apr 03, 2015 2449
Apr 10, 2015 2412
Apr 17, 2015 2456
Apr 24, 2015 2468
May 01, 2015 2528
May 08, 2015 2550
May 15, 2015 2606
May 22, 2015 2522
May 29, 2015 2591
Thanks Flyers, look forward to it.
The price for corn oil is up slightly, and the price for California DDGS didn't move much, so hopefully CAL WDGS didn't either.
Another big drop would be in the price differential between Cal and Neb ethanol prices over the last couple weeks. That of course affects Kinergy profits. Offsetting that somewhat is the corn oil coming online for Madera.
Ethanol margins Week 22
Link to pdf file
There is a pipeline proposal. There is no pipeline in place.
Slide 19 will give you an overview of the status of the proposal.
March 2015 Presentation slide deck
I don't think trucking is really all that feasible.
Seeing this continued BS manipulation again this morning, I have decided I won't buy until our seller drives this as low as he dares. I'm not giving him $4.66 a share if he intends to continue again tomorrow and the day after. I'll wait for him to drive it as low as he has the guts to.
Go ahead, short it down. In fact, I dare you. Give them to me @ $2.00 if you have the balls. I'll wait at the bottom and buy the shares you need to cover. I can see what the market cap is, and I can see settlement after settlement going through. You're not shaking my shares lose, but I will buy your shorts if you're dumb enough.
Here on the Canadian side of the border, the shares in my Questrade account have been locked up as well. Perhaps they'll be trade-able come Monday (yes, Canadian markets will be open).
I suspect you're right CHM, in that this has impacted the post-split volume (as well as the price) to date.
Margins update week 21
Sorry, the previous file wasn't retrievable because I had the privacy setting wrong. Let me know if this link doesn't open the pdf document.
PEIX margins week 21
Margins update as of Friday May 15 (week 20). For those not familiar with this margin, it only predicts the sale price of ethanol and co-products, less the cost of corn. It is NOT a net profit margin. I began keeping tabs on PEIX due to the fact that the mainstream margins provided by various sources are not specific to PEIX production. They may or may not include various co-product revenues, and usually reflect margins based on an individual mid-western state or national average.
For the PEIX alternative margin calcs, I am adjusting the corn oil production percentage on a weekly basis going forward. This is to reflect the addition of Madera corn oil production, which went into effect in Week 20. Again, please remember that the alternative calc is an attempt to adjust for co-product sales, based on the current lower cost of corn.
I will be very curious to see how the alternative calc comes out for Q2 vs. the PEIX standard formula. Of course, come Q3 it'll be right back to square one, with the addition of the Aventine production.
Link to PDF file
I trust this new file sharing site works well for everyone :)
Just a reminder, Canadian markets are closed today for Victoria Day.
Just a reminder, Canadian markets are closed today for Victoria Day.
Thanks for that, postyle. Pretty hard not to pick up the tone of the judge in that document.
Sorry about that, I updated an error in the spreadsheet and then re-uploaded it. I guess that killed the previous link. Here, this should work
PEIX Q2
Look at the Kansas City column under the Milo heading. The daily price is given per cwt, but the weekly price is recalculated to price per bushel.
The price shown is the buyer's bid price. I'm sure PEIX would then have to pay a slight premium, but it sure makes me wonder about how the numbers would play out. Of course I highly doubt the price will stay on par with corn forever, but on the other hand, this also happened in January. It just seems an opportunity if they're nimble enough to take advantage of it.
I would think that higher transportation costs would have the opposite effect - it would curtail importation from other states.
Did you notice what the average basis was for corn in Q1? It was quite low ($0.93/bushel, vs the $1.28 figure that PEIX provides for guidance). That would suggest rail shipping costs are down considerably (or at least they were). Good for Kinergy, I suppose, or anyone else looking to sell Midwest ethanol in California. Not so good for the PEIX plants, as their margins remain lower than the national numbers (of course, if that corn basis continues to be as low as the Q1 average, that would help the margins considerably). Supply is exceeding demand, and the West Coast inventory continues to grow.
There's something else that really sparks my interest though. I don't know if you noticed the cost of milo in Kansas on the Q2 spreadsheet. It's fallen like a stone, to the point where it's actually on par with corn. I really have to wonder what kind of opportunities this could present down the road, when PEIX/Aventine combined are a buying force on the grain markets. Of course, any development on that front will first require a positive settlement over the rail access/land dispute that Aventine is currently involved in. Not to mention, I have to wonder whether PEIX has made any moves. I wonder what the rail shipping cost is from Kansas City? It must be at least worth consideration, for as long as the prices remain where they are, to buy milo and take advantage of the added incentives.
Exactly, that's what I believe to be happening. The west coast inventory numbers remain quite high, while the overall US numbers continue to drop. It would be healthy to see a 25-30 cent premium for West Coast ethanol, instead of the 15-20 cents we've been seeing. I suspect it's why the PEIX margin continues to be so low compared to even the Mid-west numbers (around 65 cents last week, as opposed to 78 cents for Nebraska and 92 cents for Illinois).
Aren't those terminal prices? Rack prices are the ones reported by DTN
Daily Ethanol Rack Prices
No, I missed. I expected the opportunity to be a bigger window than it was.
Sorry, there was an error in the PEIX margin calc. I've adjusted in in the following reposting:
I'm expecting a miss on earnings. I hope I'm wrong, but I'm also not currently holding. From what I can tell, I'm expecting the Kinergy side earnings to be similar to Q4. However, the PEIX production margin looks to in line to take a pretty big hit.
The PEIX numbers for Q4 (taken from the Q4 earnings PR) were as follows:
Cost of corn $4.97
Sale price of ethanol $2.15
Value of co-products as a percentage of corn costs 28.5%
Note, there was a calculation error in the PEIX margin, It's fixed now.
So
Revenue/gallon - cost of corn less value of co-products
=$2.15-($4.97*(1-0.285))/2.8 gallons/bushel
=$2.15-$1.269
=$0.881/gallon
Compare that to the numbers for Q1 produced by the PEIX formula.
The unadjusted PEIX formula predicts $0.358. That's a huge drop (52 cents/gallon) in revenue. Multiply that by quarterly production of 50M gallons, and it forecasts a very substantial drop in gross revenues.
I would take that as a worst case scenario If I'm correct in the prediction that the co-products should be worth more than the PEIX formula predicts, it will help dampen that loss. Of course, none of this takes differences in other differences in quarterly expenditure into account.
I guess we'll know soon enough, but I'm expecting a miss. On the bright side, the numbers to date for Q2 suggest increased earnings for Kinergy, and at least break-even for PEIX. Add the combined synergy of Aventine in the mix, as well as the increase in corn oil production, and Q2 should be profitable. As I stated earlier, I'm definitely a buyer on any substantial post-earnings dip.
I would not read too much into the alternative calculation I provide. I'm putting it out there to test against the PEIX formula when we're seeing lower corn prices, as well as to get input on how it might be adjusted going forward to make it more accurate. It makes a couple assumptions:
1. That corn oil sells for basically the same price in California as the average I'm tracking for Nebraska and Illinois.
2. That PEIX is producing 1.2 lbs of corn oil per bushel of corn
3. As I can only get a DDGS price for California, I'm utilizing a ratio between the difference in Nebraska DDGS and WDGS prices, and assuming that can be applied to California.
FYI the PEIX formula, adjusted to use the Cal Corn price instead of the CBOT+basis price for corn, predicted a production margin to within $0.003 of what the Q4 numbers turned out to be. I applied the alternative formula to Q4 to test it, and it came in around 12 cents too high.
Again, I remind people that the PEIX production margin is NOT a profit margin for the company. It only predicts the value of products produced, less the cost of corn. It does not take any operating costs into account.