As someone who works in the industry as well, I can 100% validate what Fritler is saying, its 100% correct - small industry so good chance we know each other tbh.... The export margin is gone entirely, with the likely scenario from here being we go back to a more traditional margin environment whereby you make nothing or even lose on an export sale (i.e. buy it off the interior market and sell it offshore for less than the logistics costs to get it to that sale destination) to keep utilization of supply chain up. Only way I see margin returning in a material way is if the offshore markets moon again as we will lag here in Aus and hence margin will return, but on the brink of NH harvest and Russia pounding bids, it looks unlikely. I owned GNC when the big years kicked in (as did half the grain industry), I sold out and am now looking at potentially shorting them given the above - I believe the water mark is in on their earnings. IF (and its definitely an if), the East Coast crop returns to normal (conditions looking good now, but forecasts are pessimistic at best), there is no way GNC trades at these levels, especially if you consider there will be a) neg export margins and b) a lot of on-farm storage has been built in the past few years as growers needed to spend to reduce their big tax bills.
GNC Price at posting:
$8.26 Sentiment: Buy Disclosure: Held
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