Currently low US ethanol prices failing to attract export interest

30.08.2018

"Maybe they think it's going lower," said one broker.

But buyers have seen little reason to step into the US ethanol market as prices could see further downside pressure.

Brazil, one of the largest buyers of US ethanol in recent years, is in the middle of the crop season in its Center-South region, which has driven down prices there.

With little need to bring in product right now, and domestic prices so low, Brazilian buyers have not booked as many imports.

Some incremental demand has come from smaller buyers, but overall export programs have seen little support from current values.

"The demand we will have is the demand we have had all along," said another source. The market is flat so there's no rush to buy up front."

Production has remained high in recent weeks as milder weather in the Midwest has allowed plants to maintain high output without sacrificing efficiency for running cooling equipment.

Stocks have also stayed high, exacerbated by a delayed export that was expected to draw down Gulf Coast inventories in last week's Energy Information Administration data.

"That boat was going out to the Arabian Gulf, at least 500,000 barrels," said the broker. "There's debate that some locations meter the product as it goes on the ship and some locations where it doesn't get metered until the whole boat is loaded out."


spglobal

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