Ethanol futures flip to a premium over gasoline but how long it will last is unknown
Category: Fuels
In Illinois, the period of healthy margins for Midwest ethanol producers may be coming to an end as ethanol futures shift over to a premium over gasoline. Corn prices are holding fairly steady this year but gasoline prices have fallen to a 6.5 year low this week, pushing ethanol from a discount to a premium over gasoline. Though ethanol has only traded at a premium a handful of times over gasoline since 2010, second month futures are already trading at a premium. Short term premiums shouldn’t impact buying demand much but if the trend becomes more than just a blip in the market, blenders may choose to reduce ethanol purchases.
Category: Fuels