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Research Vlog: Commodities & Congress

05.07.2018 | Ben Phillips, CFA
Corn States vs. Oil States
 

 

 

This Week's Highlights


  • Two commodity industry groups are battling right now to protect their business models. It’s the corn growers of the Midwest against the oil refiners of the South.

 

  • A change in the country’s ethanol mandate could meaningfully market impact the agriculture and refining industries. Below are the companies and sectors we’re watching:

 

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  • Ethanol Producers: Archer Daniels Midland (ADM), Valero Energy (VLO), and Green Plains Renewable Energy (GPRE) are among the top 5 ethanol producers in the U.S. Increased ethanol demand may benefit the largest producers and increase ethanol production margins, which have been weak due to industry overproduction.

 

  • Oil Refiners: In our view, refining companies benefit from RIN reform. Companies such as Marathon Petroleum (MPC), Phillips 66 (PSX), HollyFrontier (HFC), and CVR Refining (CVRR) may see their margins expand as the price of RINs decrease or waivers are granted.

 

 

Read More from this week's Policy Insights: Corn States vs Oil States.

 

 

 


 

 

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Important Information

Active Weighting Advisors LLC ("AWA") is an SEC-registered investment adviser that manages ETFs under the brand name EventShares Funds. Mr. Phillips is the Chief Investment Officer of AWA. The views expressed are subject to change, and no forecasts can be guaranteed. The comments may not be relied upon as recommendations, investment advice or an indication of trading intent. AWA is not soliciting any action based on this document. In preparing this document, the author has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Investing involves risk, including the possible loss of principal and fluctuation of value. Mr. Phillips and AWA disclaim responsibility for updating information. In addition, Mr. Phillips and AWA disclaim responsibility for third-party content, including information accessed through hyperlinks. For more information about EventShares, contact us by calling 877.539.1510 or visit our website at www.EventShares.com.

 

Policy Investing

Policy investing focuses on understanding the laws and regulations that impact companies. It attempts to find mispriced assets and invest in those companies before the market understands the implications to a company’s profitability and operations.