UPDATE 1-BioFuel says lacks liquidity to meet hedging losses

(Recasts, adds details, share movement)

Aug 12 (Reuters) - BioFuel Energy Corp (BIOF.O: Quote, Profile, Research) said it does not have enough liquidity to meet huge hedging losses, sending its shares down more than 52 percent to a lifetime low.

The company realized about $26.1 million of losses due to closing out of various corn, ethanol and natural gas hedges with Cargill Inc [CARG.UL], a U.S. agribusiness giant.

Based on current commodity prices, BioFuel Energy also said it had an additional $19.9 million of unrealized mark-to-market losses under hedging agreements.

The company said though it recored a $10.1 million mark-to-market gain on its corn futures and options position at June 30, starting mid-July corn prices dropped, resulting in the hedging gains turning to losses.

BioFuel is in talks with Cargill to agree to a schedule of payments in the short-term.

BioFuel Energy said it had hedged about 40 percent of its expected corn requirements for the third quarter, 30 percent for the fourth quarter and 12 percent for the first and second quarters of 2009.

Shares of the company, which had a market capitalization of about $40 million before Tuesday's change, were down more than 50 percent at $1.25 in afternoon trade on Nasdaq. Trading was halted earlier in the day. (Reporting by Adveith Nair in Bangalore; Editing by Jarshad Kakkrakandy)