VeraSun says third quarter operating loss as high as $637 million

In South Dakota, VeraSun Energy announced that it will report an operating loss of up to $637 million in the third quarter, having locked in to prices of nearly $8 per bushel for corn, while corn and ethanol prices fell rapidly through the period.

Yesterday the December contract for corn stood at $3.77 on the CBOT, while ethanol fell to $1.65 per gallon for the December contract. With wholesale RBOB gasoline at $1.21 per gallon, ethanol demand is at a low point for the year based on the spread between ethanol and gasoline prices.

VeraSun had originally projected a loss of up to $103 million for the quarter in guidance issued in September. The company had revenues of $1.08 billion for the quarter, up from $221.9 million in the corresponding period of 2007. The scale of losses is unprecedented in the US ethanol industry, in which VeraSun holds 13 percent of market share.

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