I can't reply to private messages. I only have the basic membership Sorry.
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Yes, and I'm attempting to follow up on it somewhat. It's hard to determine what's actually reported as inventory assigned to an individual PADD. Here's a link to the instructions to ethanol production facilities:
EIA-809 WEEKLY OXYGENATE REPORT INSTRUCTIONS
From the inventory reporting instruction section:
End of Week Stocks
• Report stocks as of 7 a.m. Eastern Time Friday, which is the end of the report period. Stocks should be reported corrected to 60 degrees Fahrenheit (0 F) less basic sediment and water (BS&W).
• Report stocks of both denatured fuel ethanol (Code 190) and undenatured (Code 191) fuel ethanol.
• Only include stocks located at production facilities. Report
total stocks of oxygenates in the custody of the facility regardless of ownership. Report stocks in aboveground and underground storage as well as rail cars located at the facility.
• Exclude stocks held at terminals or other facilities outside of the production plant. These stocks will be reported by the operators of those facilities. Reported stock quantities should represent actual measured inventories where an actual physical measurement is possible.
Ok, so when stocks are in transit, which PADD are they assigned to? The destination, regardless of physical location? The physical location of the train as of 7 am on the Friday?
I think it all still points back to not reading too much into shifts in the individual weekly levels, so much as the overall trend.
I often think the inventory numbers need to be taken with a grain of salt. If I'm right about the "inventory" being what's currently held in tank farms, an unloaded train (inventory in the tank) as opposed to one that will arrive and unload the next day could be enough to skew numbers substantially. That's especially true when it comes to individual PADD's like the West Coast. I believe the average volume of a tanker car is 700 barrels, so a 100 unit train would hold 70k barrels.
Over the past 4 weeks, the West Coast inventory levels have fluctuated between 2213 and 2437k barrels of ethanol. That's a variation of 224 tanker cars, or 3.2 100-unit trains. To put it another way, assuming an average inventory level of 2300k barrels, the difference between an unloaded train and a 100 unit train in transit is approx. a 3% shift in West coast inventory.
I second that.
I've always assumed that the inventory is reporting what's being stored in tank farms, as they are reporting by PADD. I really don't know though.
Tracking what's held by each individual producer, including what's actually in transit, would be quite an undertaking for a federal bureaucracy. I don't think they can add that many numbers with only 3 days to turn the data around and push out a report. They'd need at least a couple weeks to do that. Heck, look at how far behind the export numbers lag, lol.
The average for this week-to-date for the production margin is hovering right around 31 cents. That, however, is not profit. That's value of goods sold - cost of materials. It does not take into account operating costs.
I think "profitability" is a bit of a misnomer right now.
I'll post an updated table of the quarter-to-date this weekend, once I have all the numbers in for the week.
I've never posted on the board, but on the other hand, I haven't gone anywhere :D
. . . although I too must confess to paying more attention to another stock atm :D
I'm sorry but when it comes to continued listing requirements (and in particular the minimum share price), I am not as familiar with the requirements of the TSE as I am for NASDAQ and the NYSE.
Could you explain which requirement AOI is dangerously close to falling short of? Here, I provided a link to what I believe to be the appropriate section of the TSE manual.
Part IV Maintaining a Listing — General Requirements
Thanks for clarifying!
This is my expectation:
@ the 4:09 mark of the presentation: "we expect to be able to make the top line data at least, available some time towards the end of the first quarter/early second quarter of this year"
@ 4:40 he explains that while they'll have the data available to them by the end of January, it then takes time to process it prior to releasing it. Perhaps that's where your expectation of them releasing the data by the end of January comes from.
Source: http://edge.media-server.com/m/p/hxu35bkp
Milo prices seem to vary a lot from state to state. I haven't paid very close attention to them (milo prices aren't given on the USDA ethanol reports I look at every friday) but I have noticed that the price has been at a considerable premium to corn for quite a while now.
Unexplained moves like that always make me wonder if something happened to West Coast ethanol prices that us unwashed masses aren't privy to until well after the markets close :/
Surely it wasn't caused by the guy on stocktwits re-twitting the Jan 5th Roth Capital price target. Nor by a downward move in corn that amounts to a whole 1.5 cent increase in the overall ethanol industry margin.
Well along with others this morning, I too accumulated some more :)
West Coast ethanol inventories finally pull back (2.305M barrels vs 2.437 last week).
US ethanol inventories gain slightly (20.387M barrels vs 20.229 last week).
Ethanol production remains relatively flat (979K barrels/day vs 978 last week)
Here's a link to the report summary:
Summary of Weekly Petroleum Data for the Week Ending January 16, 2015
Some revised numbers.
Based on the work done by Stockrosen, combined with the statement made by Neil in the Q4 conference call, I made some modifications to the PEIX margin formula. Here is an explanation of the changes along with the resulting numbers:
1. Q4 2014: Neil stated in the CC that the ethanol yield was approaching 2.80 gallons/bushel. I adjusted the the formula to reflect this from the default provided by PEIX (PEIX Ethanol - (CBOT Corn + Basis) x (1-Co product return)/2.74) to account for the increased yield (PEIX Ethanol - (CBOT Corn + Basis) x (1-Co product return)/2.80)
That results in an increase in the Q4 margin calculation from $0.847 to $0.875
2. Q1 2015: Neil also stated in the CC that corn oil production for Madera and Boardman would come online early in 2015. I further adjusted the above modified formula to reflect that increase in co-product return. I used the following logic:
a) Neil stated that corn oil value equates to $0.05 - $0.07/gallon of ethanol. I first took the middle value ($0.06) and multiplied it by 2.8 to get a value/bushel ($0.168).
b) I then divided that by the average cash price of corn to date for 2015 ($3.91) to get a percent return on the value of corn(4.3%).
c) Finally, as the increase only applies for 80M out of a total of 200M gallons of production, I multiplied that by 0.4 to get a final value of 1.7%
That resulted in a further adjusted co-product return of 31.7%, up from the previous 30% default value provided by PEIX. The impact on the Q1 2015 average to date as of Jan 16th is as follows:
The new formula still assumes a corn basis of $1.28. Although Neil did make some remarks regarding the basis, those comments are difficult to factor in at this stage. However, the 3rd column utilizes the nearby California price for corn, so it likely comes close to reflecting any difference in the basis.
Again, I caution that these numbers only reflect the difference in value of goods purchased vs goods sold. They do not reflect additional costs, including plant overhead, etc. To gain an understanding of additional cost factors, I would strongly suggest familiarizing yourself with the quarterly reports.
What I appreciated the most about the AOI presentation is the up-front honesty and openness about the current situation and how it affects their plans going forward. I think the appraisal of the current oil situation that Keith presented is realistic. It certainly aligns with my personal view of how things will unfold.
I believe in this current price range, AOI is quite undervalued. Keith spoke about recent institutional buying which would seem to support that. It might be a long time before it regains the $9-$10 range, but at this price, it's nothing short of a steal. I have to chuckle about Keith talking about oil companies trying to peg the bottom. I imagine there's more than a few of us trying to do exactly the same thing.
AOI Stockholm presentation
(yes, it's in English, you just have to get past the introduction)
January Presentation Part 1
Q1 numbers to date
I'm collecting even more data this quarter in order to capture the performance of the States where the Aventine plants are located. Hopefully this is legible, there's a lot of columns to capture. If you have a small screen, you should be able to click on the image to see a larger version.
The Cellunators that we have in place not only improve corn ethanol yield on the starch but liberate the fibers for conversion of that cellulose, which there's up to 10% fiber in the corn. If we can get a couple -- 3% of that, we will be producing cellulose ethanol and generating D3 RINS. It is our expectation that we will be doing that this year. We're trialing it and that we would hope that we would have some increment of commercial production in 2014.
So, 2-3% of production. In the last 10-Q, they reported they expect it to be up to 2%.
We are also working with CellunatorsTM technology to enable the release of cellulosic sugars from corn kernel fibers which, when released through an appropriate enzyme for commercial production, will allow us to produce cellulosic ethanol for up to 2.0% of our overall production at a plant that uses the technology.
So if I understand all this correctly, with all 4 plants running the technology, that would be 2% of 200M gallons, or 4M gallons.
They didn't say any of it was part of Q3 production. I believe the hold-up is in part because while the decision was made regarding allowing corn fiber to count, they're still waiting for a determination of whether they can claim that 2%, or whether the final number will be different.
Now I don't remember offhand whether Boardman is actually complete, but assuming it is, they state they expect "some increment of commercial production in 2014." So some imcrement of 2% of one quarter of 120M gallons of production is possible for Q4, or 0.02 x 120 x 0.25 = 0.6M gallons.
4M gallons of annual cellulosic production should be onstream at some point in 2015. The Sweetwater project is due to come online in 2016. Again from the latest 10-Q:
To this end, we are in the project development phase with Sweetwater Energy to acquire cellulosic industrial sugars. We expect this project will take at least two years.
Yes, it's all coming, but it's not all here yet.
If things haven't improved by the time the merger is supposed to close, that $10/share clause might end up protecting PEIX shareholders more than Aventine. Both operations could rack up significant losses this quarter if things don't reverse soon.
The PEIX margin hit $0.172 yesterday according to my numbers, and the differential between the Nebraska Plant and California Terminal price is only $0.07. If I let the Nebraska price lag by 1 week to account for shipping time, it's $(0.13). That's all before adding in anything for shipping costs, etc. On the slightly brighter side, the Nebraska margin reported by the USDA averaged at $0.55 last week (but I expect it to have dropped to around $0.30 this week). Can Aventine pay off their loan interest obligations and still turn anything resembling a profit at those numbers? I don't know, but I suspect not.
About 2 months ago I figured we'd dip below $40 before oil reverses. I guess we'll find out whether that mark is too high or too low soon enough. I do know the layoffs have started here in the oil business. I don't know how it's affecting the frackers, but I don't see how they can escape.
I don't expect PEIX to meet analyst predictions for Q4. That in itself isn't the end of the world though as far as I'm concerned. I think overall though, the market is reacting to PEIX taking on considerable debt and expending precious funds at a time when the ethanol industry is taking it on the chin. It's certainly an optimistic approach to the current situation. We'll know soon enough whether it's a wise approach, I suppose. I'd hate to see the situation revert back to one of being saddled with high-interest debt and up to the ears in warrants again. And that, I think, it what the market is waiting to find out. Does PEIX management really have what it takes? Or did they just get lucky?
We'll know soon enough, I suppose.
Dutch, I'm sorry but I don't have an answer for you. I'm not sure there is such a thing as a "fair price" with stocks like PEIX; there's just what the market is willing to pay. And just like ethanol, it's not willing to pay all that much right now.
I think they're more common for people who can't watch the market during the day. I use alarms on my platform, but never use stop losses. Saw the havoc they can cause on volatile stocks, where MM's could cause a $0.50 drop on a $5 stock.
What a lot of people who set stop losses don't realize is the MM's can see them, right along with all the other order data that doesn't show on L2. When they see a large pool of stop losses near the current price, they'll manipulate the share price to trigger them, and set up large buy orders below. Stop losses trigger as market orders, so triggering a large pool of stop losses can momentarily overpower any nearby buy orders and cause a flash crash. Instant profit, as usually the price recovers very quickly. Of course in other circumstances, they can also short the stock first and then trigger the stop losses, using the underlying buy orders to cover their shorts.
oops, you're right, the highlights are last week's, but the ethanol numbers are this week
Hey Dutch. Sorry, been very busy with other stocks. Here's the numbers:
West Coast ethanol inventory 2.437M up from 2.213M barrels
US inventory 20.229M up from 18.845M barrels.
Pretty normal for inventory to climb in the winter.
Gasoline stocks: 240.334M, up from 237.163M
Here's the highlights report:
U.S. crude oil refinery inputs averaged over 16.4 million barrels per day during the week ending January 2, 2015, 43,000 barrels per day more than the previous week’s average. Refineries operated at 93.9% of their operable capacity last week. Gasoline production decreased last week, averaging 8.7 million barrels per day. Distillate fuel production decreased last week, averaging 5.2 million barrels per day.
U.S. crude oil imports averaged about 6.9 million barrels per day last week, down by 205,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.3 million barrels per day, 4.6% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 760,000 barrels per day. Distillate fuel imports averaged 265,000 barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.1 million barrels from the previous week. At 382.4 million barrels, U.S. crude oil inventories are well above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 8.1 million barrels last week, and are well above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 11.2 million barrels last week but are in the lower half of the average range for this time of year. Propane/propylene inventories fell 1.6 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 9.9 million barrels last week.
Total products supplied over the last four-week period averaged 20.2 million barrels per day, up by 2.6% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 9.3 million barrels per day, up by 5.5% from the same period last year. Distillate fuel product supplied averaged over 3.9 million barrels per day over the last four weeks, up by 7.2% from the same period last year. Jet fuel product supplied is up 2.6% compared to the same four-week period last year.
The WTI price was $52.72 per barrel on January 2, 2015, $1.87 under last week’s price and $40.94 below a year ago. The spot price for conventional gasoline in the New York Harbor was $1.492 per gallon, $0.079 less than last week’s price and $1.179 under a year ago. The spot price for No. 2 heating oil in the New York Harbor was $1.709 per gallon, $0.058 below last week’s price and $1.258 less than a year ago.
The national average retail regular gasoline price decreased for the fourteenth week in a row to $2.214 per gallon on January 5, 2015, $0.085 per gallon less than last week and $1.118 under a year ago. The national average retail diesel fuel price decreased for the eighth week in a row to $3.137 per gallon, $0.076 per gallon below last week and $0.773 under a year ago
After living through decades of "oil will never see "_______" again, there's only one thing I know for certain: It will. It's a question of when, not if.
Especially in this market where new investors who hope they pegged the bottom of the energy market but aren't familiar with ethanol stocks, have bought in recently and put a stop loss in place.
One stock I was invested in, running the stops was almost a weekly occurrence. You would think that after a couple episodes, people would stop placing stop loss order, but it never happened. New money comes in, gets beat up and leaves, only to be replaced by the next round of unsuspecting bargain hunters. The MM's got to love it: wash, rinse, repeat.
I've seen stop losses run like that before (usually on fairly high-risk stocks). Usually though it's followed by an equally quick recovery.
Not to mention that with the current PEIX margins, they have to be operating considerably in the red.
I had it at $0.32 on Friday, with a weekly average of $0.306. No way they're turning a profit at those margins. Q4 wasn't that hot either. I suppose the big question for Q1 2015 will be deal or no deal? Will the share price rallies sufficiently to consummate the merger?
Taking the conservative end of the savings estimate of $3M a year/60M gals/year works out to a cost reduction of $0.05/gal.
That's pretty sweet, too bad it'll be mid-2016 before it's operational.
I agree. While I'm not fond of the addition of $135M in debt, if and when healthy margins return they should be able to pay that down in a reasonable amount of time (12-18 months?). Meanwhile, it will add somewhere in the range of $4M/quarter in interest payments, once the merger is finalized. I think the market is also reacting to the current margin situation. I suspect at present it's adding debt to both the PEIX and Aventine books.
Of course there are options to clear that debt if they so choose. One over might be to sell off the Illinois assets and focus on the relationship between Nebraska and California. Of course I suspect the Illinois plants have the healthier margins, so that might not be a move they want to make, unless the current situation continues for an extended period of time.
An interesting tidbit of information gleaned from the general discussion contained in the USDA Daily Ethanol Report:
Distillers values traded mostly steady, instances of 5.00 higher in some areas of the Eastern Cornbelt. Ethanol plants continue to maintain limited inventories. Corn basis values have showed signs of support throughout the reporting areas. A portion of this advance is derived from recent winter weather that has halted deliveries to some locations. Trade is anxiously awaiting next weeks' supply and demand report.
If they're having difficulties getting corn delivered, I would expect that to also suggest they're having difficulties shipping ethanol out . . . Now I'm not suggesting this is the beginning of a cycle the likes of which we saw last year, but some weather-forced slow-down on production would sure help the inventory situation . . .
Some numbers: Q3 vs Q4 (averages for each quarter)
Corn (CBOT near futures)
$3.596 vs $3.724
Ethanol (Cal Terminal)
$2.253 vs $2.126
Calculated margins
$1.008 vs $0.847
The Q3 margin is not adjusted for actual reported PEIX numbers paid/received. The actual Q3 margin was slightly lower. I kept the numbers unadjusted to keep the basis for comparison the same.
Difference between Nebraska Plant Price & Cal Terminal price
$0.281 vs $0.278
BTW for those who don't keep track for themselves, I have the PEIX margin coming in @ $0.25 yesterday.
. . . at an average exercise price of $61.50
(don't think we'll ave to worry about those for a while to come)
Was that last caller on the conference call Chen Lin?
PEIX sells to major distribution terminals. They then resell, including to small independent blenders. So the terminal price is the price for ethanol delivered to the terminal. The rack price is what purchasers from the terminal pay.
In the various presentations they've included it in, PEIX is very clear about using the Cal terminal price for estimating their plant margin. Mind you Kinergy does market beyond California, and it's also likely some percentage of their sales goes to independents would would likely pay a premium. However, ever since I started keeping track of that terminal price and averaging it over the quarter, it's worked out pretty close so far. PEIX has come in a little above the terminal price, but rack price tend to be 15-20 cents higher than the terminal price.
Bid: $1.66
Ask: $1.69
http://www.progressivefuelslimited.com/Web_Data/pfldaily.pdf
I wish it was $1.85, but that's the wholesale rack price, not the terminal price that PEIX sells at.
Tomorrow's conference call should prove interesting
PEI to Discuss Aventine Merger
Wednesday, January 7, 2015 at 1:30 PM PT
Here's the registration link for the call.
Following that up on the 12th:
Pacific Ethanol to Present at Sidoti & Company Emerging Growth Institutional Investor Forum
Link to the PR release
I think we aren't even near to bottom on oil yet. I expect it to dip into the high $30's unless OPEC calls a special meeting first. The part I don't get is the continued performance of corn, especially at a time you would think at least some ethanol producers would be scaling back. Ethanol near futures are taking another huge hit today.
I'm not having any problems
Progressive Fuels
bid 1.72/ask 1.75 (I use the average between them in my margin) calculation
Source: Progressive Fuels Limited
PEIX doesn't sell at the rack price.
I get the Nebraska (and now Illinois as well) data from the weekly USDA ethanol report, which shows the average plant selling price.
Click on the indvidual state and then the Friday ethanol production report. I don't use the daily ethanol report because the ethanol numbers are only actually updated once a week, and the individual State reports give me the corn, ethanol and distillers grain numbers, as well as the resulting production margin.
To calculate the Kinergy margin, I am using the California price reported by Prpgressive as the selling price, and the Nebraska plant ethanol price from a week prior for the purchase price. I figure 7 days is a reasonable allowance for transport and resale.
Of course at this point we don't know the total costs to Kinergy in terms of rail transportation and overhead, nor do we know the total volume of sales Kinergy does on this basis (as opposed to the percentage handled for a straight management fee, similar to the marketing deal they have with Keyes). Nor do we know if it's sold at the current destination market price at the time of purchase, so it's all a little bit of an experiment to see if there's any correlation between the numbers this data set generates and overall PEIX profits. I figure though, that if I track it long enough it should provide at least some insight when used for quarter over quarter comparisons. Mind you, that's all going to change come Q2 when the merger is completed.
I wouldn't put a lot of emphasis on the Kinergy margin at this point, it's pretty difficult to assess it's validity.
The last 2 weeks really hurt the overall average (the weekly averages dropped to $0.570 and $0.406
BTW the margin is based on CBOT near futures + basis. If you use the cash price for corn + basis instead of the near futures, the number comes in a little higher, @ $0.862 as opposed to $0.847
Q4 numbers. Remember,these numbers do not incorporate operating overhead, taxes, etc. They simply reflect the difference in value between materials in vs material out.
I have the Q4 production margin coming in @ $0.847
I have the quarterly differential between California and Nebraska ethanol (where Kinergy buys ethanol for re-sale) @ $0.284. The big question here is how much does it cost Kinergy to cover transportation and operating overhead? This is the 1st quarter I've tracked this so I have no comparison to last quarter.
There are some encouraging highlights, looking ahead to the merger. I did track the USDA average margin for Nebraska plants and it came in @ $0.99 for Q4. I didn't track Illinois last quarter, but I have noticed that the USDA reported margins tend to trend somewhat higher than Nebraska (last week Illinois was $0.87 vs $0.75 for Nebraska. I had PEIX coming in @ $0.47).
Keep in mind that the USDA numbers for Illinois are based on DDGS, and don't include corn oil. The Nebraska USDA numbers are based on WDGS and also don't incorporate corn oil. Anyone happen to know the details for the different Aventine plants in terms of corn oil and distillers grains?