Today in Biofuels Opinion: “In the latest case of hedges gone wrong…”

Pavel Molchanov, energy analyst for Raymond James: “In the latest case of “hedges gone wrong” – owing to the sharp volatility in the corn market throughout much of the year – VeraSun shined a light on a much wider-than-expected net loss this quarter. After being caught on the wrong side of the trade during corn’s meteoric rise, VeraSun exited its corn hedging position in July and re-priced its physical purchases at the then-current market price, which ultimately proved to be near the top of the overall commodity rally…a similar situation, with heavy corn hedging losses (both cash and non-cash), occurred at BioFuel Energy in August.”

Maria Rosaria Di Somma, director general of Italy’s Union of Biodiesel Producers. “We have started late. We are still at 1-2 percent (of biofuels in fuel mix) and that gives us some breathing space (with respect to reduced EU biofuels targets).  We confirm all our short- and medium-term targets… We see no impact on the current capacity and short-term investment from the (planned) change in percentages.”

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