Question-and-Answer Session
Operator
[Operator Instructions]
Your first question comes from the line of Ian Horowitz with Soleil Securities.
Ian Horowitz - Soleil Securities
Hi. Good morning, everyone. Very good quarter.
Just a couple of quick questions. Ajay, there’s some indications on your expectations for average corn price and average ethanol price for the quarter. You didn’t seem to do that. That was intentional?
Ajay Sabherwal
Ian, to some extent that approach that we have taken is we provide that we’re in the spot markets primarily on the ethanol side and we give you some sense of the fixed obligations that we have taken on. We also say that our fixed obligations are shared with our alliance pool. So instead of giving a dollar number, we lay out the piece box that is used to calculate it. Now, when we receive some feedback that perhaps we should give a price expectation rather than the freeze spots but there’s no sinister even. For this, we just simply lay out the freeze spot that gets to that and the main message is on the ethanol side we are principally in the spot market.
On the corn side, we have said that we have been aggressive in pre-purchasing our corn and we said we’ve got 39% of our corn needs for the balance of the year locked in at around $5.15 to $5.20 a bushel. Now, the greater proportions of those are in the earlier periods and at lower prices. And we’ve also told you the various hedges, etc. and how is the make up of those hedges. What we’ve gone predicted is with the remaining percentage is going to be worth because corn prices are really volatile. Thus, we stay away from giving a precise number but we do provide the piece box.
Ian Horowitz - Soleil Securities
Okay, that 39%, by the way, that’s the gross consumption, correct? That’s not a 39% in net.
Ajay Sabherwal
Absolutely, it’s the gross consumption.
Ian Horowitz - Soleil Securities
So with your natural distiller hedge, you get to a very high percentage there?
Ajay Sabherwal
Absolutely, and I would go beyond the natural distiller hedge because the wet mill has much more than a natural distiller hedge.
Ian Horowitz - Soleil Securities
Yes, I know. Fair enough, the co-product hedge.
Ajay Sabherwal
That’s right.
Ian Horowitz - Soleil Securities
Another quick question: You saw an increase in spot in your average ethanol price for the quarter but it seems when we look back on your performance in previous quarters, it seems like you’ve drifted a little bit away from the average spot price for the quarter. And I was just wondering if there was any comments on that or was it just a timing issue on when the gallons were moving through the system?
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