Replies to post #27673 on Alto Ingredients Inc (ALTO)

[value1008]

And Keith says he sold his 5k shares of PEIX today on account of this. Sometimes he has sold prematurely in the past, other times he's sold near the right time.

[pavement13]

My thoughts are as follows:

1. Clearly the estimated demand was incorrectly calculated being as that we have already exceeded that level in mid-November and stockpiles decreased while production was up. They obviously did not account for increased exports due to the Brazil drought, etc.
2. How did they not realize we would reach this threshold prior to today's report? It was easy to calculate. Did they think producers would stop production when this arbitrary number was reached?
3. I remember when Keith published an article in February saying he sold around $7. He's a good analyst, but his word is not gold.

The fact of the matter is ethanol stockpiles are decreasing. Today's response was irrational and will correct itself soon.

[Rule_62]

Well, if it took him until today to draw that conclusion, I have to ask why. Nothing substantial really changed in terms of the overall picture. I wonder what he thought the total production would be for the week that today's number would have shocked him?

Exports for the year as of the end of August have totalled 12.969M barrels. If I use that average and extend it for the year, that's 19.453M barrels. There's 42 gallons in a barrel so that's 0.8 billion gallons exported.

That's 14B gallons left for domestic. Assuming the run rate this week remains constant through the end of the year.

Three thoughts about that:

1. If I was an ethanol producer, I would of ran and sold every gallon I could the past week.

2. The RFS will have a lot to say about what the final demand will be.

3. As I alluded to earlier, how much did things really change this week? Production increased by a whopping 24k barrels over last week, from 946k to 970k barrels. That's just over 1M gallons. Extend that out over the final 7 weeks and you get an increase of a WHOPPING 8 million gallons.

Was a projected increase of a whole 8 million gallons over the balance of the year as a result of today's numbers REALLY enough to suddenly cause a panic about overshooting the mark by 0.8 BILLION gallons? That's 800 million gallons, not 8 million.

I smell something. Do you?