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Bleak outlook for ethanol

• Ethanol stocks plummeted Thursday due to Wednesday's news of corn shooting up 14 cents and Bush finally showing concern over corn-ethanol. Verasun Energy (VSE) (-9.03%) and Aventine Renewable Energy Holdings (AVR) (-12.02%) hit new 52-week lows while Pacific Ethanol (-10.90%) neared its own of $4.20 a share. Assisting the downfall was a report published by the Wall Street Transcript which set a bleak outlook for ethanol this year. In the report, Pavel Molchanov of Raymond James & Associates stated "a typical ethanol producer will be at best breaking even this year and possibly losing money on these companies

• Add "bad weather" to the already lengthy list of problems corn-ethanol needs to overcome. Heavy rains, severe winds, and tornadoes throughout the Midwest has propelled corn into uncharted territory. July corn on the CBOT rose 28.6 cents Thursday to settle at an all time high of $6.43 1/4 a bushel. Farmers are saying this is the worst weather they have seen since 1993, when U.S. crops suffered from weeks of rain that eventually led to the severe flooding of the Mississippi river. Agriculture Secretary Ed Shafer expressed "a lot of concern" for the corn crop in Thursday's summit on the global food crisis. The option of replanting corn that was damaged in May is dwindling as farmers are deciding whether they should replace their corn with a shorter growing season crop like soybeans. All ethanol producers can do now is desperately pray for sunshine as there is already a tight supply of corn available.