Biofuels Stock and Financial Outlook for October 3: Stocks expected to open higher, ADM in focus as it confirms ethanol plans

Stocks were expected to open higher as investors expect good news from unemployment claims data released this week. Major stock indices were trading up 0.1% this morning in the stock futures market.

In biofuels, investors will weigh a renewed commitment by Archer-Daniels-Midland (ADM) to proceed with construction of an added 550 Mgy in ethanol capacity, despite weak ethanol prices and an announcement by VeraSun this week that it would delay one of its projects.
The Biofuels Digest Index, a basket of publicly traded biofuels stocks, lost 1.76% to close at an all-time low of 96.67 as weak job data caused jitters in the broader markets and continued problems among ethanol producers resulted in lower profit estimates and share price targets from analysts.

Aventine fell 6.46% to $9.12 after Aventine (AVR) CFO Ajay Sabherwal attempted to make the case yesterday for his company at Citigroup’s “Ethanol on the Cob II” biofuels conference. Aventine has fallen more than 10 percent in the past two days. VeraSun (VSE) and US BioEnergy (USBE) were also off more than 2%, while Archer-Daniels-Midland (ADM) and The Andersons (ANDE) were down less than 2%.

Microcaps had a more mixed day, with Green Energy Resources (GRGR.PK) up over 11% on the day while Environmental Power (EPG) was down 3.04% to close at $5.10.

In the broader markets, weak jobs data led to losses as the Dow closed down 79.26 to 13,968.05, the S&P 500 down 7.04 points to close at 1539.59, and Nasdaq down 17.68 points to close at 2729.43.

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