Record-breaking ethanol production pressures Chicago prices into backwardation

December 19, 2016 |

In Illinois, end of the year tightness in the Chicago ethanol market has led to a 20% premium for the December swap at $1.8050/gal over the January paper price of $1.57/gal. The backwardation in the market is the largest seen in two years. January and February prices are heavily weighed upon by record production coming out of the Midwest. Export demand in recent months has seen producers focus on export-quality fuel, swapping out Argo fuel for domestic use and moving the export-quality product to New York Harbor and Gulf Coast.

Category: Fuels

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