Ethanol Blog

Chicago Ethanol Time Spreads Widen on Bearish Fundamentals

The price spread between prompt delivered ethanol at the Argo terminal in the Chicago market and next week and February delivered supply widened to 2.0 cents and 3.5 cents, respectively, from a 1.5-cent discount, as a dearth of short-term demand and building supply pressures prompt values, sources said Wednesday.

In-tank transfer ethanol at Argo traded at $1.29 per gallon Wednesday afternoon, down 3.0 cents on the day, with next week supply seen at $1.31 per gallon and February supply talked in a $1.32 by $1.33 per gallon bid/ask spread.

One source noted supply in the Chicago market increased amid rising plant production and logistical problems in moving supply east to the New York Harbor market following record breaking snow accumulations in northern Pennsylvania that briefly halted train deliveries.

The Energy Information Administration last week reported ethanol production in the United States averaged 1.09 million bpd during the week-ended Dec. 22, the second highest output rate on record, with the all-time high of 1.108 million bpd reached during the week-ended Dec. 1, 2017. Of the 1.09 million bpd production rate, the Midwest accounted for output of 998,000 bpd.

George Orwel can be reached at george.orwel@dtn.com

(ES)

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