Ethanol futures tumble on lower production costs

By Rick Kment, DTN | July 25, 2016

Sharp losses developed in ethanol futures during the last month with traders extremely cautious concerning recent pressure in corn prices as well as consistent losses in other energy markets throughout July.

Demand is expected to continue to erode through the last half of the summer driving season, which is creating additional widespread market pressure. Ethanol futures have fallen 24 cents per gallon over the last month as traders remain concerned that demand growth through the rest of the year will not continue. Corn futures again fallen below $3.50 per bushel, to $3.35. That's more than $1 per bushel below the seasonal high set just one month ago.

Additional widespread pressure continues in rack and spot prices as buyers are unwilling to aggressively step up given recent market losses. Additional seasonal pressure may continue to develop in ethanol, but the recent heat seen through the country could bring some volatility to corn and ethanol prices if we see yield reductio

 

Gasoline Prices (By Region)

REGION

SPOT

RACK

West Coast

$1.3039

$1.4824

Midwest   

$1.4058

$1.3401

East Coast

$1.2978

$1.3901

Front Month Futures Price (RBOB) $1.3575

 

 

 

 

 

Ethanol Prices (By Region)

REGION

SPOT

RACK

West Coast

$1.6200

$1.7000

Midwest   

$1.4650

$1.6809

East Coast

$1.5260

$1.6300

Front Month Futures Price (AC) $1.4630