Wednesday, April 05, 2006

Ethanol: All the Rage

Is Ethanol all the rage? It sure seems that way. With the US government announcing incentives for companies that produce ethanol, investors have been bidding up shares of companies related to ethanol in a major way. Ethanol is made from corn and hence agricultural companies have seen a nice rise as well. Even the venerable Barron's had a bullish feature story on Archer Daniels Midland. The theory goes that everyone will want ethanol and the government will require a certain percentage of gas to be composed of it. This will drive up the price of ethanol and help corn harvesters too. Companies are even entering the IPO market, as noted from this DealBook article.

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