The tracking of the construction of the seven COE plants that make up the promise of a strong financial foundation for the Greenshift Corporation is challenging to say the least. Those seven Corn Oil Extraction Plants are laid out from the upper mid-west to the Northeast. The first to begin production is in Oshkosh, Wisconsin. The second, in Mount Morris, New York - south of Rochester, only recently began to move product. The third in Marion Indiana, well we hear rumors that we might get strong rumors soon. From the most recent newsletter published by Midwest Grain Producers - the owner of both the Riga, Michigan (4thCOE) and Lakota, IA (5thCOE) ethanol facilities - we get a time line of completion for their projects. They predict a 3rd quarter completion for the Riga Michigan Corn Oil Extraction and an early 4th Quarter completion for the Lakota IA Corn Oil Extraction facility. They also expect to see a completion of the co-located bio-diesel facility in Lakota by mid 2009. This is good news and an independent confirmation that the Big Seven COEs are coming on line by about Thanksgiving - just as described in the February 19th Shareholder Letter.
Here is the link to the Midwest Grain Processors Newsletter : http://www.mgpethanol.com/news/newsletters/MGP%20NEWSLETER%201%20Quarter%202008.pdf
The seventh COE in Milton, WI may be the last of the BIG SEVEN to come on line. I would like to thank Lightbeam on the iHub for putting some independent pictures on the web for us to look at. For you junior conspiracy theorists it appears to an actual brick and mortar ethanol facility - not a phantom paper facility drawn up at One Penn Plaza.
Here are Lightbeam's pictures. http://investorshub.advfn.com/boards/read_msg.asp?message_id=27587720
Here is the Milton websight.
http://www.unitedethanol.com/
In the October 2007 Milton newsletter they independently acknowledge the Greenshift COE contract but no time-line is given. They also talk of the long term bio-diesel project.
http://www.unitedethanol.com/images/E0135601/UEfall07finalWebsite.pdf
The ADVANTANGES of Corn Oil in Bio-Diesel Production
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Nothing like a fast horse to make a good jockey look great!!
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Three reasons to climb aboard GERS Greenshift!!
1. Rising Costs of Raw Material
Most Bio-diesel in the US is made from Soy oil - canola (oil seed) in Europe. The supply of bio-diesel feedstock is a major factor limiting the development of the bio-diesel industry. From the USDS's February 2008 Oil Crops Outlook Report comes some interesting finds. The Bio-diesel market input requirements are natural oils for raw material, and natural gas (need I say anything?) for heating requirements. The costs of raw material account for between 60-90% of the cost of bio-diesel production and these costs have lately increased tremendously. The trading predictions for 2008 - lard (.36 and .40/lb) and edible tallow (.37 and .42/lb) are at or near all time highs. Soybean oil is also expected to trade at .475-.515/lb this year. This is more than twice its 20yr ave. IT TAKES MORE THAN SEVEN POUNDS OF SOYBEAN OIL TO MAKE A GALLON OF BIO-DIESEL. Soybean & and Animal Oil Bio-Diesiel plants in IA have shut down when shortages have kicked local prices above even the high national market prices.
Here is a good source of the typical trials of a bio-diesel plant - Western Iowa Energy SEC filing
2. Rising costs of Methane.
ADM technical literature provides an almost understandable explanation on the making of the Fuel: "Bio-diesel is typically produced by the reaction of a vegetable oil or animal fat with an alcohol such as methane or ethanol in the presence of a catalyst to yield mono-alkyl esters (bio-diesel) and glycerine". As all you foreign policy geeks know - the world methane supply is tied to Chile (methanol producer) and its ongoing dispute with Argentina (Chile's Natural Gas Supplier-required to produce methane) - and the price is rising. So what about Ethanol??
GET WITH THE FLOW!
3. All bio-diesel is not the same! Bio-diesel make from animal fats - or tallow based - will not flow properly at temperatures below 61F. Palm oil is close to Tallow! Their use will be restricted by climate. Soybean oil and Corn oil flow at temperatures near freezing. Petrol diesel flows down to -30F. Therefore Bio-diesel requires a proper blending with Petrol-diesel of between 2 and 20% - and an occasional chemical additive - in order to keep those big Trucks a'running all winter long. [Since I am north of Kornfield Kounty - we have about nine months of winter and three months - that we don't really call summer - but we can get to the outhouse without strapping on our snow shoes.] On the good side of the coin - even only a 3% bio-diesel blend replaces the lubricity lost with the newer low sulfur fuels required by The Clean Air Act.
ADM rates Palm Oil close to animal fats and Canola Oil (like from out oilseed plant) a little better that soy oil.
Now if you add Points one, two and three - and you co-locate Bio-diesel and Ethanol Production - combined with a cheap corn oil feedstock readily available - with good flow rates and value enhanced benefits added to both!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
GERS - Greenshift Corporation - is in the right place at the right time!
Skunk's conclusion: Greenshift's recent advances in technologies that extract the remaining corn oil from the distillers grains—offering multiple benefits to the parties involved—will increase margins for our customers, and Greenshift share value and shareholder wealth.
Skunks Grade:
Actual/Predicted/Grade
Trading range .145-.19/.15-.23/B- Got the bottom right
Close above .20 none/one/ D Ya, win some . . .
Friday's Close .16/.22/D- Ethanol stocks weak 4 week
Buy between .145-.16/.15-17 A- Got that one pretty good
Overall "B"- Not bad - but you can do better Skunk!!!
FORECASTS**
For the week of 17 - 21 March
Friday's volume was under 40K and we are under half of last weeks volume. The trading range has even gotten smaller. We never got a trade outside the .15-.16 range since mid-week. The slight move of the Bollinger Bands I mentioned last week has developed into the start of the contraction I was looking for - That tells me to expect to see a significant move in one direction or the other soon. I am calling it for this week - with a slight dip before a smash through the .20 cap that has kept us trapped below it since the .24 close on 20 Feb. I see a quick tip of the hat down to as low as .13 early in the week to acknowledge the lows - then a bounce to .25 before a close off the high at .24 on Friday. I expect volume to pick up as we may get word on COE production or another contract this week and as those who think they know - begin to trade positions before the annual is released..
Trading Range .13-.25
Close above .20 two
Friday's close .24
Best Buy .13-.14
Significant events Ahead: We have an 80% chance we will see a request for extension on or about 30 March 2008 rather than the actual report. If the extension is used the annual report would then be filed and posted about 15-17 April. 1st Quarter 2008 will be reported by May 15th. This has been timely in the past. It will come only 30 to 45 days after the annual report.
If you want to see the possible future by looking in the past - just look at the run up to the Annual Report in 2006. From 16 March to 30 March (when the extention was filed) we saw a final dip to $1.30(adjusted price) and until 10 April we saw a tiny trading range and low volume. Then on 10 April all heck broke loose as we went up more than a dozen times over that recent low!! The Sec report was received on the 17th and the price peaked on the 18th at $16.00 a share!!! (adjusted price) - The price stayed strong through 1 May with smaller volume. Hopefully we could see a jump like that on this - or a future report - and the price would be sustained and built on by profits. Twelve times our recent low would put us at $1.20 a share. Now there is some history that bears repeating! {And would send the BEARS a running!}
$12.50 Share Price in FEB 2010**
Thats right - that is over 80 times today's price.
Skunk has no stinking reason to change his long range prediction. How I came to this number is explained in blogs below. Expect the number to be further refined as information is gleamed from the before mentioned, upcoming annual and 1st quarter report.
++ When the bands narrow drastically, a sharp expansion in volatility usually occurs in the very near future.Disclaimer - this is a (somewhat) healthy and as of yet unprofitable addiction - please note the notes below about being responsible for yourself and your money.
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