Biofuels Digest Indexâ„¢ (BDI) up 0.38 points to 102.61 on broad market rally as credit fears ease

The Biofuels Digest Indexâ„¢ (BDI), a basket of 21 major public biofuel stocks, rose 0.4% today to 102.61 as credit crunch fears subsided on the heels of supportive pronouncements by President Bush and Federal Reserve Chairman Ben Bernanke.

In the biofuels sector, UBS downgraded his ethanol outlook on the strength of reports that price weakness for ethanol would continue into 2008. UBS analyst Chris Shaw noted that production of ethanol is expected to nearly double between now and December 2009, adding to concerns that the spread between ethanol and corn prices will not improve.

Shaw’s ethanol price forecast was pegged at $1.87 per gallon, and downgraded the forecasted earnings and revenues for VeraSun Energy (VES), US BioEnergy (USBE) and Aventine Renewable Energy (AVR). However, at the bell VeraSun was up $0.30 to $12.95, Aventine up $0.15 to $14.31, while US BioEnergy was down $0.10 to $10.41.

Sector giant Archer-Daniels-Midland was up $0.11 to $33.70, while Earth Biofuels (EBOF.OB) was up sharply and Better Biodiesel (BBDS.OB) was up 5.9% to $1.80.

Green Energy Resources (GRGR.PK) introduced a new electromagnetically kiln dried woodchip that generates coal-equivalent heat without coal-equivalent emissions. The stock was unchanged at closing.

In the broader markets, the Dow Jones Industrials were up 119.01 to 13,357.74, the S&P 500 rose 16.35 to 1473.99, and the Nasdaq was up 31.06 to 2596.36. The markets reacted positively to the announcements at the White House and Fed for tackling the growing subprime mortgage meltdown.

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