Posted 4/11/2019 08:41 (#7432620) Subject: Ethanol update. Ethanol at $0.72 discount to RBOB
CBOT May Ethanol futures are trading at $1.325
NYMEX May RBOB Futures are trading at $2.045
Thus High Octane, Low Carbon, Less Toxic Ethanol is trading at a $0.72 per gallon Discount to RBOB after trading at Par in July of 2017 BEFORE the Illegal Small Refinery Waivers started to impact the markets.
In spite of Big Oil's influence on current policy.. We got a good week of usage with Blended Ethanol at 919 k bbls. Since Sept 1st 2018 Domestic Blended Ethanol is up an average of 6 k bbls per day.. If we had the Infrastructure in place for the market to respond more quickly to the price discount.. I would think we could see ALOT more ethanol blended.
Ethanol production at 1,002 k bbls per day was up slightly.. Given the poor margins and weather factors plants are not pushing hard with some taking maintence.. We should see an uptick in production going forward. There are I believe 3 new plants coming online.. adding about 200 myn gallons of capacity soon.. as well as about 6 expansions.
For the crop year.. since Sept 1st.. ethanol production is down 1.8% Chatter last week from the Grain Co Products reports show that grain processed for ethanol was down notably Q2 17/18 to Q2 18/19.. This appears to be accurate as this quarter has been more challenging from the Illegal Waivers, Poor Profitability and weather challenges.. However, it's still possible to get back in the game..
We have the Crop, We have the Capacity and We SHOULD HAVE ACCESS to the Markets to promote a Cleaner, Cheaper and Better Low Carbon fuel.
Implied Disappearance was also up to 197 k bbls.. again this could be in transport but also could show up in exports. This is the time of year where we made huge sales a year ago at this time where we exported RECORD Volumes similar to disappearance we saw this week. Total Disappearance at 1,116.1 k bbls was the highest for 2019.