Ethanol Blog

Rallying RBOB Futures Lifts Ethanol Spot Prices

Spot ethanol prices in Chicago, the New York Harbor and in Houston moved slightly higher early Friday afternoon amid renewed buying interest enlivened by rallying New York Mercantile Exchange RBOB futures, which settled at $1.9377 -- the highest settlement since Aug. 31, 2017, when Hurricane Harvey was lashing Houston.

Prompt delivered ethanol at the Argo terminal in the Chicago cash market traded up 0.75cts at $1.355 gallon, again trading near an eight-week high. Argo spot values are holding a 1.0cts premium to Rule 11 delivery for next week shipment, 0.25cts stronger than day prior, after normalizing at midweek. Rule 11 ethanol deliveries moved into an atypical premium to Argo on the second trading day of 2018 amid logistical issues caused by winter weather, holding a 1.25cts premium to Argo prior Friday.

Prompt delivered ethanol by barge in the New York Harbor gained 0.5cts to $1.46 gallon, an 11.5cts premium to Argo. The Argo-NYH spread had widened sharply from late December through early week amid challenges in moving supply from the Midwest to East Coast, ending prior Friday at a 14.25cts NYH premium. The spread is typically at an 8.0cts to 10,0cts premium. On Jan. 10, the NYH premium reached a one-year high at 16.0cts.

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

(CZ)

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