Course 13 of 20 · Biofuels and SAF Desk Academy

Ethanol Economics & Hedging

Stage D, Fuel margin and customer claims. Level 6 of 10.

The ethanol crush and blending economics and the grain, energy and ethanol hedge construction around it.

123 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 03, Course 10, Course 11

Enrol or enquire See the 123 chapters
How a chapter is delivered

One chapter is one idea taken to the point of use

Each chapter covers one idea to the point where you can use it, and comes two ways: a narrated explainer, and a deep dive audio discussion of around thirty minutes that works the same material at depth.

Self-paced throughout, and the same chapters can be taught as a cohort. Chapters run in order: each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

11 modules · 123 chapters

Open any module for its full chapter list, in teaching order.

M0 The Grinding Plant as a Commercial Object Ch 1-10
  1. What a Grinding Plant Buys and What It Sells
  2. Taking the Conversion Yield as a Fixed Coefficient
  3. Dry Mill and Wet Mill: Two Revenue Stacks
  4. Who Owns Ethanol Capacity and What Each Owner Wants
  5. The Marketing Agreement Between a Plant and Its Marketer
  6. The Blender's Seat Is Not the Producer's Seat
  7. Where the Credit Leg Enters the Margin as a Price Input
  8. Three Questions an Ethanol Desk Answers Before Trading
  9. The Margin Stack This Course Assembles, in Order
  10. Why the Plant Carries Margin Risk the Molecule Does Not
M1 Building the Ethanol Crush Margin Ch 11-23
  1. The Crush Margin in One Line
  2. Choosing the Corn Price That Belongs in the Margin
  3. The Ethanol Price That Belongs in the Margin
  4. Per Bushel or Per Gallon: Picking One Denominator
  5. Co-Product Revenue Adds to the Output Side
  6. Distillers Corn Oil as a Second Co-Product Line
  7. Natural Gas and Power Inside the Conversion Cost
  8. Denaturant Cost and the Volume It Quietly Adds
  9. Enzymes, Yeast, Chemicals and Water as a Cost Block
  10. Two Margins: Cash Conversion and Fully Loaded
  11. The Board Crush Against the Plant's Cash Crush
  12. A Worked Crush Calculation, Part One: The Inputs
  13. A Worked Crush Calculation, Part Two: Reading It
M2 Direction, Sign and Seat Ch 24-33
  1. Why the Plant Is Short Corn Before It Buys a Bushel
  2. Why the Same Plant Is Long Ethanol Before It Sells a Gallon
  3. Short Natural Gas: The Cost Nobody Calls a Position
  4. A Widening Crush Helps the Plant: Fixing the Sign
  5. The Marketer Who Is Short Gallons and Owns No Plant
  6. The Blender Who Is Long Finished Petrol and Short Components
  7. The Farmer-Owner Long Corn and Long the Plant
  8. The Refiner Who Blends and Buys at the Same Time
  9. Reading a Position Report and Naming Every Sign
  10. The Sign Errors That Cost Money on This Desk
M3 The Grind Decision and the Option Inside It Ch 34-45
  1. Run, Slow or Idle Against the Cash Margin
  2. The Cash Cost Floor a Grind Must Clear
  3. Why a Plant Keeps Grinding at a Loss on Full Cost
  4. Slowing the Grind Rather Than Stopping It
  5. What One Idle and Restart Cycle Costs
  6. The Breakeven Run Length After a Restart
  7. The Grind as a Series of Decisions, Not One Choice
  8. The Commitments That Bundle the Grind Decisions Together
  9. Valuing the Grind Option by Averaging Payoffs
  10. Why the Flooring Shortcut Misprices a Thin Quarter
  11. Scheduling Maintenance Into the Weakest Forward Margin
  12. A Worked Idle Decision Through a Weak Quarter
M4 Corn Procurement and the Grain Hedge Ch 46-58
  1. Turning the Grind Schedule Into a Bushel Requirement
  2. Corn Basis at the Plant Gate as the Competitive Variable
  3. Why a Plant Bids Basis Up to Keep the Grind Full
  4. Corn Futures as the Flat Price Leg
  5. Choosing the Corn Month Against the Grind Period
  6. Buying Corn Futures Against Unpriced Bushels
  7. Lifting the Futures Leg When the Cash Purchase Prices
  8. Rolling the Corn Leg Before First Notice Day
  9. Deferred Price and Delayed Pricing Bushels in the Book
  10. The Corn Hedge When the Plant Is Already Full
  11. Variation Margin on the Grain Leg and Who Funds It
  12. Euronext Maize and a European Plant's Grain Leg
  13. Wheat as a Grain Input Where Maize Is Short
M5 The Energy Leg Ch 59-68
  1. Why Purchased Energy Is the Second Cost That Moves
  2. Tying the Gas Burn to the Grind Rate and the Dryer
  3. Hedging the Gas Leg With Listed Natural Gas Futures
  4. From Hub Price to Delivered Gas at the Plant
  5. Electricity Cost and the Demand Charge a Grinder Pays
  6. Combined Heat and Power and the Cost It Removes
  7. Wet Grain or Dry: Trading Gas Cost for Market Reach
  8. The Energy Choice That Changes the Credit Input
  9. When an Energy Hedge Outlives the Grind It Covered
  10. A Worked Conversion Cost Hedge Across One Winter
M6 Selling the Gallons and the Output Hedge Ch 69-80
  1. How Gallons Leave the Plant: Rail, Truck and Barge
  2. The Chicago Hub and a Plant's Distance From It
  3. Listed Ethanol Futures and What They Settle Against
  4. Selling Ethanol Futures Against Unsold Production
  5. Fixed Price Term Sales Against Index Linked Term Sales
  6. The Monthly Average Sale and the Hedge It Needs
  7. Tank Car Leases and Terminal Space Inside the Netback
  8. The Marketer's Pool Price and How a Plant Is Paid
  9. Brazilian Hydrous and Anhydrous Grades and the B3 Contract
  10. European Ethanol Sales and the T2 Quotation
  11. A Worked Outlet Comparison Across Two Buyers
  12. Carrying Finished Gallons in Tank and What It Costs
M7 Co-Product Economics Ch 81-89
  1. Wet and Dried Distillers Grains as Two Markets
  2. The Local Feed Draw That Caps Wet Grain Sales
  3. Pricing Distillers Grains Against Competing Feed Values
  4. Export Demand for Distillers Grains and the Netback It Sets
  5. Distillers Corn Oil and Its Downstream Buyer
  6. Hedging a Co-Product With No Deep Listed Contract
  7. High Protein Feed and the Capital Decision Behind It
  8. Fermentation Carbon Dioxide as a Third Revenue Line
  9. A Worked Co-Product Revision to a Crush Margin
M8 Blending Economics Ch 90-101
  1. Why a Blender Blends: Volume, Octane and Obligation
  2. Ethanol as an Octane Component Against Refinery Alternatives
  3. The Energy Content Discount a Blender Applies
  4. The Blend Spread Against a Petrol Blendstock Price
  5. Vapour Pressure and What It Costs a Summer Blend
  6. The Specifications a Blended Gallon Is Sold Against
  7. The Blend Wall Argument and Its Assumptions
  8. Higher Blends and the Economics of a Flex Fuel Pump
  9. Splash Blending Against In-Line Blending Economics
  10. The Discretionary Blend Decision Above an Obligation
  11. When the Credit Value Turns a Negative Blend Spread Positive
  12. A Worked Blend Decision at a Terminal, Illustrative
M9 The Forward Margin and the Hedge Programme Ch 102-113
  1. The Forward Crush Curve for One Plant
  2. Seasonal Shape in the Ethanol Crush
  3. Old Crop and New Crop Inside the Forward Margin
  4. Locking a Quarter of Margin Across Three Legs at Once
  5. Partial Cover and the Band an Owner Approves
  6. Hedge Ratios When Three Contracts Have Different Sizes
  7. Options on Corn Futures to Cap the Input Cost
  8. A Floor Under the Ethanol Leg and What It Costs
  9. A Three Legged Collar Around the Crush
  10. Why a Locked Margin Still Moves on the Books
  11. Margin Captured Against the Margin That Was Available
  12. A Worked Hedge Programme Across One Crop Year
M10 The Plant End to End and the Limits of the Crush Ch 114-123
  1. An Integrated Ethanol Year, Part One: The Plant and Its Contracts
  2. An Integrated Ethanol Year, Part Two: Grinding Through a Thin Spring
  3. An Integrated Ethanol Year, Part Three: Reconciling the Result
  4. The Margin Pack a Plant Board Will Actually Read
  5. Presenting a Hedge Loss Beside the Purchase It Protected
  6. Common Errors in Crush Construction
  7. A Case Where the Margin Model Misled the Desk
  8. What the Ethanol Crush Cannot Tell You
  9. Where the Remaining Ethanol Exposure Is Picked Up
  10. One Plant, Four Numbers That Must Agree

The brochure gives each of these 123 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 13 of twenty

It stands alone, and it is also the entry point to the Biofuels and SAF Desk Academy pathway.

Enrol or enquire See the whole pathway