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Cramer's Top Ethanol Pick

It was the Iowa caucuses that first propelled Barack Obama toward the presidency. But in order to win there he had to take the ethanol pledge. Well, now that the former long shot is now our 44th leader of the free world, Cramer thinks Obama will follow through on his promise.

So if investors want to make a play on this, which stock should they buy? Cramer likes Archer-Daniels-Midland , the largest ethanol producer in the world.

This call is a change of heart for the Mad Money host, on both the company and ethanol, but with the competition being vanquished by plummeting corn prices and Obama backing the alternative fuel, Cramer thinks ADM’s a buy.

ADM’s a massive venture, operating in 60 countries and handling everything from wheat to cocoa to oilseeds to corn. The size grants the company at least one benefit: ADM can switch its end products to meet global demand. If the world wants ethanol rather than corn syrup now, then ADM just shifts production.

The same basic idea works when certain parts of the world experience a shortage. When wheat crops in Australia and Eastern Europe failed this year, ADM used its size to move U.S.-sourced wheat to those areas and cashed in.

ADM also makes money as demand for meat increases. More meat requires more wheat, and that equals more business for this company.

ADM even has a bioplastics division, and there’s a new plant being opened in Iowa. Bioplastics are used as either a full replacement for oil-based plastic or, like ethanol, in combination with oil-based plastics to make plates, containers, Styrofoam, cups, utensils, etc. Bioplastics usage is expected to grow 122% between 2007 and 2012.

So ADM works, Cramer said. Just be sure to wait for a pullback before buying. And be patient – it might take a while for this investment to generate returns in a market as tough as this.

Don’t miss Cramer’s one-on-one with University of Iowa students. Check out this video for more on ethanol, Deere and more.






Jim's charitable trust owns Deere.

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