[Brad1970]

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Hi All,

I bought Verasun Energy (VSE)the beginning of this year at
exactly $17 in anticipation of Bush's speech which involved
supporting ethanol production. The stock shot up to $20
but unfortunately came crashing down again today due to
them posting a loss of $312,000 (0 cents/share) as opposed to an expected profit of 11 cents/share. Apparently, the
loss is due to corn prices and higher than expected costs
on building a new ethanol plant.

I feel dumb, because Im an International Economy major, and
of course knew all about corn prices going up. Im even doing
a report on Ethanol in Brazil, I just had forgot to
correlate that to my stocks. Anyways, my analysis is that
corn prices are going to retreat in the coming year while
oil prices continue to go up this summer and level off
in fall. Im more sure of the corn price, because of the
massive planting that was done this year, which should
cause a rather big surplus assuming crops grow well, and
of course corn prices should drop back down.

Of course, I have no idea how hedged VSE is among other
things. Does anyone have an opinion on the ethanol sector
right and any opinions on short term/long term or just
on corn/oil prices?

Thanks much [img]/images/graemlins/smile.gif[/img]

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Don't expect corn prices to go down very much over the next few years. As long as the US stays in Iraq & the price of oil stays sky high...ethanol will be pushed as alternative to curb our foreign oil usage. Corn & other grains such as grain sorghum & soybeans will also benefit in price.