US ethanol higher on feedstock, export demand

07.04.2017

US ethanol spot prices were higher on Wednesday, reflecting rising feedstock corn prices and an unexpected surge in US exports over the next few months.

Chicago hub prices were assessed at $1.64-1.66/gal, up from $1.51-1.53/gal on 29 March. Midwest prices were $1.59-1.61/gal, up from $1.46-1.48/gal.

California prices were $1.82-1.84/gal, up from $1.65-1.67/gal; meanwhile, New York Harbor prices were higher at $1.72-1.74/gal, up from $1.61-1.63/gal the previous week.

The US Department of Agriculture (USDA) released its Prospective Plantings [1]report last week, which has anticipated that corn planted area for all purposes in 2017 will drop by 4%.

According to sources, feedstock corn prices rose as a result of the report. In addition, extended cold weather in the Midwest is said to be keeping farmers from their plantings, which has also contributed to the upward trend in corn prices.

May feedstock corn futures settled at $3.65/bushel on 5 April, up from $3.58/bushel on 29 March.

In addition, market players said that US ethanol exports are expected to rise significantly in the next few months.

One source said that the market had previously anticipated export volumes of around 65,000 bbl/day, but recent sentiment had placed that figure closer to 90,000 bbl/day.

Much of that volume is expected to go to Brazil, sources said.

The second quarter is traditionally a heavy turnaround period, which is thought to also be having an effect on ethanol production.

Refiners have begun to transition from winter to summer gasoline blends, although this process may be slowed by the turnarounds.

As the market heads into warmer weather, demand for gasoline is expected to increa


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