Ethanol crush margin rises on falling corn prices

15.08.2017

The US ethanol crush margin rose to 28.39 cents/gal Monday, an increase of 2.59 cents/gal from 25.80 cents/gal on August 7, the date of the last published Platts Crush Margin Tracker.

The benchmark Argo ethanol assessment has been relatively range-bound, assessed between $1.5875-$1.5795/gal, falling on August 10 after a steep dip in corn futures.

Weekly US EIA data showed production slightly higher for the week ended August 4. EIA data showed production dropped 17,000 b/d to 1.01 million b/d. The EIA data also showed a large build in stocks levels.

Total stockpiles grew, adding 495,000 barrels to finish the week with 21.347 million barrels. Four of the five regions showed a build, led by the Gulf Coast, which added 352,000 barrels.

Demand also showed a slight increase, despite the weekly refiner and blender net ethanol input dropping to 938,000 b/d, a 13,000 b/d decrease. The four-week rolling average of the refiner and blender net ethanol input rose 3,000 b/d to 939,000 b/d, and the four-week rolling average of gasoline demand rose 3,000 b/d to 9.7063 million b/d.

Argo was assessed at $1.5790/gal Monday, down from $1.5875/gal on August 7.

The front-month CBOT corn futures contract has fallen 89.5 cents to $3.6275/bushel Monday from $3.7225/bu on August 7.

A simple crush margin can be calculated by dividing the cost of corn per bushel by 2.8, the number of gallons of ethanol that a bushel of corn can produce. The resulting number is the cost of corn per gallon of ethanol.


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