Joe Victor is a Business Development Specialist with Minneapolis Grain Exchange, Inc., where he monitors cash grain activity and cash grain opportunities. He provides marketing advice through this blog.
Ethanol Trumps HFCS
May 05, 2010
Two news articles within the most recent 48 hours are working in opposite directions -- or are they? The first news article states that consuming HFCS (high-fructose corn syrup) is ebbing lower in favor of price reduction, among other reasons, for sugar. Despite the yeoman’s work the Corn Refiners Association has done to suggest that HFCS is just as healthy, if not healthier, than sugar for an individual, other outside forces have food giants swaying away from HFCS.
On one hand, you are able see
how HFCS has lost 15% actual grain volume in the most recent nine years and represents 3.7% of the total use with corn for fuel escalating. What was 7.2% of the total grain use for fuel has now ballooned to 33.3% and is expected to grow into 2015.
The other article released on Tuesday suggests that Archer Daniels Midland reported the biofuels business very good and global demand for grains strengthening. It should come as little surprise that Cargill is doing well, and we can add to the list of biofuel powerhouses Poet, Valero and other notables such as Hawkeye Energy and The Andersons.
Those companies that have a vested interested in HFCS as well as ethanol include Cargill and top-ranked ADM. Those HFCS companies that are not producers of ethanol but of other corn byproducts include Corn Products International as well a small host of others.
Is there an offset between corn for ethanol and HFCS? Does one offer more than the other when it comes to corn price potential?
We welcome your questions and comments.........Joe Victor
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