Ethanol production through the middle of June reached record high levels based primarily on recent weakness in the corn markets. Lower corn prices and strong profit margins at ethanol plants have helped fuel aggressive production increases through the late spring and early summer. This has quickly moved the overall industry from a tight inventory situation through early spring to another potential round of ethanol supply gluts, which has many market watchers concerned.

Ethanol blender demand is picking up as summer driving increases ahead of the Fourth of July holiday and the prime of summer vacation season. But it is uncertain just how much long-term support will remain in either the ethanol or RBOB gasoline (reformulated blendstock for oxygenate blending) markets given lack of strong growth in the economy through the summer. Ethanol prices are likely to remain in their current range over the near future with the focus on underlying gasoline demand and corn availability and prices. 

Gasoline Prices (By Region)
REGION	SPOT	RACK
West Coast	$3.2033	$3.4930
Midwest

$3.0953

$3.5740

East Coast

$3.4565

$3.4780

Front Month Futures Price (RBOB) $3.0988

 

Ethanol Prices (By Region)
REGION	SPOT

RACK

West Coast

$2.3900

$2.9900

Midwest   

$2.1400

$2.8000

East Coast

$2.2400

$2.8600

Front Month Futures Price (AC) $2.1290