Sunday, November 11, 2012

Corn Oil Demand

There are of course, many uses for corn oil besides biodiesel.  Yet I thought this analysis below in the HOMELAND ENERGY 10Q was interesting - summing up at least some of both the seasonal and political influences on the price of corn oil.

"Management anticipates that corn oil demand will decrease during the winter months due to decreased biodiesel production. One of the primary uses for our corn oil is as feedstock for biodiesel production. However, biodiesel production has slowed dramatically recently due to the fact that the 2012 RFS for biodiesel was reached in late September or early October 2012. This decreased corn oil demand may lead to lower corn oil prices during our fourth quarter of 2012."

From Here page 17

SkunK

29 comments:

Anonymous said...

[ ] Despite a challenging 2012, Minnesota’s ethanol producers are optimistic about the industry’s future, fueled by a new state Department of Agriculture report showing the industry's strength.

U.S. ethanol production is headed to drop for the first time in 16 years this year, as it's caught between high prices for the corn it buys and low prices for the ethanol it sells. The Energy Department says output is down 14 percent this year.

The problem is an imbalance between supply and demand, according to Richard Eichstadt, of Preston, general manager for the POET Bio-refining ethanol plant in Preston.

“Right now the demand for ethanol is pretty even to what the supply of ethanol is,” says Eichstadt, “Hence, the prices for ethanol are a little bit lower and the cost of corn was higher this year, so that’s a relationship that is not as good as if the price were very high for ethanol and the cost is very low for corn.”

He says price fluctuations are an expected part of the industry, one that producers prepare for. His company, POET, is investing heavily in capitol projects like corn-oil and upgrades to their fermenters to ensure that they are ready for when the market takes a more agreeable tone. [ ]

http://m.postbulletin.com/postbulletin/db_/contentdetail.htm?contentguid=blqGv3zY&full=true#display

nobody12378 said...

If/when GERS prevail in the years ahead in the current litigation the BIG question will be, will the industry take them seriously then?

Anonymous said...

take them seriously enough to pay them a royalty or go out of business ???

Slashnuts said...

PEIX May Have Licensed With GERS!$!$!$

I believe Edeniq's system is based on GERS' method patents of the mechanical extraction of oil from concentrated (heated) stillage.

Take a look at Edeniq's website and you'll see what I mean. http://www.edeniq.com/page/today

In the picture, Edeniq shows the GERS' patented method as a base (thin stillage, evaporators, mechanical) then their sodium hydroxide treatment comes into play after the GERS base method. Edeniq's system claims .6 pounds while the GERS preferred Alfa-Laval system can extract .8 pounds with method I. GERS method II can do 1.33 pounds and we'll see that by the end of this year.

There are two other ethanol producers that installed Edeniq's system in the past. Blue Flint of N.D. and Amaizing Energy of Iowa. GERS sued both of these producers for using GERS' base method with Edeniq's system, without a license from GERS. The Andersons, ANDE, stepped in and bought out the infringer Amaizing Energy, settled the lawsuit, and licensed with GERS.

GERS is still suing Blue Flint and Westfalia, the centrifuge supplier to Edeniq. http://www.nd.gov/ndic/renew/projects/r-005-011fr.pdf

Finally, Edeniq's largest customer and part owner, Flint Hills, bought out Advanced BioEnergy, a customer of GERS. Flint Hills transferred the license rights to GERS patent's, and I believe Flint Hills is paying a royalty to GERS for the base method.

Remember Edeniq said their system can be added to existing COES systems which, along with their website and literature in their patent, proves it's based on GERS' basic method of extracting oil after the evaporation of stillage.

I think it's a lot like Solution Recovery Services, they have their own system and producers using SRS' systems are licensed just like some of those using Edeniq's, Westfalia, and ICM's systems are licensed with GERS.

Good Luck To All!$!$!$!$

Slashnuts said...

Westfalia's Own Claims Shoot Holes In "95% Defense"

While GERS said they "recovered 95% in that example, I think this speaks volumes about who will win the litigation. Westfalia's own language in 2010 agrees with what GERS is saying today. The percentage in the example was from the targeted stream, not total available oil.

"...Westfalia for the RS220 centrifuge designed for oil recovery applications. Their specification defined that when operational, the system will extract on average 98% (as measured volumetrically) of free, non-bound oil available from the feed."

http://www.nd.gov/ndic/renew/projects/r-005-011fr.pdf

Slashnuts said...

The 484 is very important for Greenshift.


The defendants fought hard to stop the 484 patent because in it, everything the defendants said that made GERS' patents no good has been reviewed by the patent office. The patent office said GERS patents are good despite what defendants claimed.

The defendants had the nerve to say GERS was stalling when they asked the USPTO to review the patent again. GERS is required by law to submit all evidence that infringers think invalidates the patent. The USPTO agreed the patents are still good, and nothing the infringers said changed that. The judge agreed with GERS that the patents should be added to the case despite every single defendant fighting to stop it. I'm very excited the new patents, with the full backing of the USPTO, have been added to the case. The only thing invalid is the infringers excuses for stealing patented technology from GERS.

Good Luck To All!$!$!$!$!$!$!$

Anonymous said...

thanks slash

Anonymous said...

Can you say "Work Arounds" I'm telling you boys that they are out there and more are coming as this case dras on and on. Greenshift will be worth far less in the future according to some I have spoken with in the industry...I hear they are trying to patent water.

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nobody12378 said...

There is truth here. Technology and innovation never stand still. That is the beauty of capitalism -- remember 8 track tapes? It is inevitable that someone will build a better mousetrap in a field clearly linked to energy independence. No sane person can dispute these statements. Thus, the truth is that there is a shelf life on GERS' technology. The real question is whether it is longer than the time it will take to resolve the litigation to protect to current state-of-the-art technology before it is antiquated. This is a component of the gamble here; do GERS and its common shareholders have the time to cash in?

Anonymous said...

When will this cases of patents rights will close? Will GREENSHIFT be the winner or loser

Tenstacks

Anonymous said...

I heard its called method 2

nobody12378 said...

Do you really believe that innovation will stop with GERS' Method 2; that there are not other bright people in this field besides DW?

Anonymous said...

have seen nothing better have you?

Slashnuts said...

Corn LP: COES Paid For < 7 Months

"A third item of importance was the addition of corn oil
extraction equipment. Although this took a capital investment
up-front, it has paid for itself in less than seven months time.
Corn oil sales through the first nine months of 2012 are
$2,991,000, a revenue stream that was nonexistent two years
ago."

A Spike In Ethanol Market From E15 Sales

"Going forward through the winter months, we could see a
spike in the ethanol market from E15 sales, since as you may
remember, E15 was approved for 2001 and newer vehicles in
January of 2011."

"In layman’s terms, E15 was not granted the volatility tolerance
of one pound per square inch that is granted to E10, and
this becomes an issue from June 1st through September 15th
during the EPA’s summer volatility restriction.
Meeting this restriction for E15 requires a special blendstock,
one that is more expensive with limited availability during
the summer months.
Now that September 15th has passed and the volatility tolerance
level is not as crucial as it is during the hotter summer
months, you could start to see more E15 enter the marketplace."

Corn LP Q312 Report
http://www.cornlp.com/Newsletters/November12.pdf

Good Luck To All!$!$!$!$

Anonymous said...

Gers has a "work around" that "work around" It will be patented as "work around I "

Slashnuts said...

GPRE's Oil Yields 32% Higher Than Valero's

GPRE Not Slowing Down Thanks To Earnings From Corn Oil!

Here's the CC highlights from GERS' #1 largest customer.

In Q312, GPRE operated at 87%. They produced 161 million gallons of ethanol out of the 185 million gallon per quarter capacity.

"Our ethanol yield in the quarter was 2.84 gallons per bushel of corn, and we had a slight uptick in our yield on corn oil to .66 pounds per bushel."

"Increase in corn oil production year-over-year is attributable to improving our corn oil yield per bushel to 0.66 pounds compared to 0.50 pounds in 2011."

"With better margins and our plant maintenance shutdowns completed, we anticipate our fourth quarter production rate to be closer to about 92% or 93% of our expected operating capacity."

GPRE is projecting they'll operate at about 93% capacity in Q412. So while other producers like Valero are shutting plants down, GPRE is increasing production. http://www.bizjournals.com/sanantonio/news/2012/10/31/valero-idles-ethanol-plants-in.html

If you look at the fact that Valero is getting .5 pounds of oil per bushel and GPRE is doing .66 pounds, this may be the difference between being able to operate or not. With GPRE's oil yields 32% higher than Valero's, I wonder if this is the reason Valero has not installed the ICM AOS at the rest of their plants.(Remember they said they would study the possibility of it?)

Since GPRE is projecting an increase in operating capacity to 93% or 172 million gallons of ethanol, we can expect oil extraction to be right around 40 million pounds in Q412. That is unless of course extraction yields go higher. (172MG/2.84X.66)

GPRE predicts return to profitability in Q412
"We are approximately 60% locked for ethanol margins in the current quarter at profitable levels and even though the early harvest accelerated operating income from our agribusiness segment into the third quarter, I'm confident to say that our ongoing operations will return to profitability at the net income line in the fourth quarter."

GPRE not shutting plants down thanks to earnings from corn oil

"...we do a variable cost analysis literally every day, and so corn oil is part of that cost analysis. So we – based on that, we never really saw a time because of the earnings from corn oil that we needed to slowdown any further or shutdown our plants. While we reported separately, we do take it into consideration in our decisions we make to a slow or shutdown our production."

http://seekingalpha.com/article/966461-green-plains-renewable-energy-s-ceo-discusses-q3-2012-results-earnings-call-transcript?find=93%25&all=false

Slashnuts said...


"Farha Aslam - Stephens, Inc

Hi, can you guys hear me?

Todd Becker

Yes, we can.

Farha Aslam - Stephens, Inc


Great. Thanks. First question is on the ethanol group and balancing that with your corn oil. In the quarter, it looks like you definitely balanced production in ethanol with what you earned in corn oil extraction. Could you just share with us your strategy going forward, if you see a negative quarter, is that how you’re going to try and run the two segments?

Todd Becker

Yeah, what we do is, we actually look at – we do a variable cost analysis literally every day, and so corn oil is part of that cost analysis. So we – based on that, we never really saw a time because of the earnings from corn oil that we needed to slowdown any further or shutdown our plants. While we reported separately, we do take it into consideration in our decisions we make to a slow or shutdown our production.

Farha Aslam - Stephens, Inc

And so kind of going forward, if we see negative ethanol margins, but can we assume that you're going to slow down to the degree that corn oil offsets that?

Todd Becker

Well, we may not slowdown. It just depends on that related to variable cost related to corn oil. So, yes, and we look at all of that, but it doesn't actually mean that we slowdown in a negative environment."

Good Luck To All!$!$!$!$!$

nobody12378 said...

Means nothing until the main issues are addressed -- financing, dilution,(real)settlements/litigation closure with money exchanging hands. Sorry, everything else is a waste of words.

Anonymous said...

your right slash. if aos was so good valero would expand it. but have to shut down now without gers

Slashnuts said...

6 Important Motions Granted In GERS Favor

All defendants opposed the 484 patent.
The 484 is very important for Greenshift.

The defendants fought hard to stop the 484 patent because in it, everything the defendants said that made GERS' patents no good has been reviewed by the patent office. The patent office said GERS patents are good despite what defendants claimed.

The defendants had the nerve to say GERS was stalling when they asked the USPTO to review the patent again. GERS is required by law to submit all evidence that infringers think invalidates the patent. The USPTO agreed the patents are still good, and nothing the infringers said changed that. The judge agreed with GERS that the patents should be added to the case. I'm very excited the new patents, with the full backing of the USPTO have been added to the case. The only thing invalid is the infringers excuses for stealing patented technology from GERS.

To me it doesn't look the defendants are stalling but rather hurting. It looks like they're losing every ruling. It's obvious defendants can no longer afford this lost cause of defending against this solid family of patents. In a negative margin environment, paying lawyers, that're losing, is really hurting the defendants. They don't have the money for this any longer. ICM is laying off workers left and right. GERS is profitable and pays a small fraction of what the defendants are throwing away.

"The court disagrees with defendants' assertion that Cleantech's request that the USPTO consider additional documents before issuing the 484 patent evidences a lack of diligence. Given the allegations of invalidity and inequitable conduct in this case, Cleantech's decision to ensure that the USPTO considered all relevant documents pursuant to 35cfr was prudent."


"CleanTech’s motions to amend the complaint to add allegations of infringement of the ‘517 patent against Defendants Blue Flint, United Wisconsin, Bushmills, CVEC, Heartland and GEA are GRANTED as they are unopposed.

CleanTech’s motions to amend the complaint to add allegations of infringement
of the ‘517 patent against Defendants Cardinal Ethanol (“Cardinal”), Lincolnway,
LincolnLand and Big River are
GRANTED pursuant to L.R. 7.1(c)(5), as those
Defendants failed to file a response within the deadline.
Similarly, CleanTech’s motions to amend the complaint to add allegations of infringement of both the ‘517 and ‘37 patents against Defendants ICM and Flottweig are
GRANTED pursuant to L.R. 7.1(c)(5), as those Defendants failed to file a response within the deadline.

CleanTech’s motion to amend its complaint against Iroquois regarding infringement of the ‘517 patent, Master Dkt. No. 633, is
GRANTED

Justice requires that CleanTech be allowed to amend its complaint against Adkins to add allegations of infringement of the ‘517 patent and its motion to amend, Dkt. No. 631 is
GRANTED.
CleanTech’s motions to amend the complaints to add allegations of infringement of the ‘484 patent, Master Dkt. Nos. 573, 576, 579, 582, 585, 588, 591, 594, 597, 600 & 603, are
GRANTED."


http://greenshift-gers.blogspot.com/
https://docs.google.com/file/d/0B_ch8gAs4lCccEZjeEhWUDJLVlk/edit?pli=1

Good Luck To All!$!$!$

Anonymous said...

So, what you're saying, Nobody, is that unless YOU state it, it's a waste of words? How very Nobody of you.

Who's the cute little genius....you are!

nobody12378 said...

Are you watching the sell-off today? Hard to stake claim to the positive value of words that have no positive impact. I suspect that Tech is going to tell us that 0.007 is going to be tested. This sell-off so close to release of the Q3 may be instructive.

Anonymous said...

WOW 500000 buy @3 !

Anonymous said...

volume kicks in before run up

Anonymous said...

360000 on bid !

Anonymous said...

1085000 buy after market ! whats going on

Slashnuts said...

Glacial Lakes Energy Operating Above Capacity

Another example of a GERS customer that's "operating above capacity" thanks to the "significant revenue stream of corn oil".

• We continue to evaluate our production rates to determine at what rate we should operate our plants.
Thurs far, our analysis show that we are better to operate above full capacity to minimize losses over our
fixed costs but that could change as market conditions change. Both of our operation departments have
achieved exceptional production levels during these periods.
• We are exploring new revenue enhancement ideas and opportunities including corn oil separation which
is now operational at both of our facilities and providing a significant revenue stream especially to our
Mina plant. We also continue to review other strategies that could add value to our production process

http://www.glaciallakesenergy.com/newsletter/2012_09-2.pdf

Anonymous said...

EPA Rejects Requests to Ease U.S. Corn-Based Ethanol Mandate

http://www.businessweek.com/news/2012-11-16/epa-rejects-requests-to-ease-u-dot-s-dot-corn-based-ethanol-requirement

 
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