FCStone to supply corn for Gevo’s Luverne plant

By Gevo Inc. | June 04, 2015

Gevo Inc. recently announced that it has entered into an agreement with FCStone Merchant Services LLC to originate and supply corn for Gevo's plant in Luverne, Minnesota.

Engaging FCStone to conduct Gevo's corn purchasing at Luverne is expected to free up more than $1 million of working capital, which has previously been tied up in corn inventory. This relationship leverages the strength and reputation of FCStone, one of the largest and most respected corn buyers in the United States.

By leveraging FCStone's scale and corn buying expertise, Gevo expects to significantly improve its corn purchasing capabilities by increasing the number of suppliers (farmers and elevators) from which Gevo will buy corn, and by extending the duration of its forward corn purchasing commitments, which should enable Gevo to take advantage of lower corn price environments.

As part of this arrangement, Gevo will pay an origination fee for every bushel of corn it purchases from FCStone. FCStone will pay Gevo an annual fee for leasing the corn storage bins at the Luverne plant.

FCStone is a division of INTL FCStone Inc. and a leader in providing specialized financial services in commodities, securities, global payments, foreign exchange and other markets to its clients. FCStone utilizes innovative origination tools to assist commercial organizations in sourcing their grain needs. FCStone constantly designs new programs to procure corn by working closely with commercial grain elevators, livestock feeders and ethanol plants, with the goal of enhancing margins. INTL FCStone Inc. recognized operating revenues of almost $500 million in fiscal year 2014.

"This strategic relationship is intended to improve our corn purchasing ability, improve margins, free up cash, and allow us to focus on our core businesses," said Patrick Gruber, CEO of Gevo, Inc. "We are very pleased to be working with FCStone, and look forward to continuing to work with and support the local corn community in the Luverne area."