December 31, 2014
BY Rick Kment, DTN
Ethanol supplies are becoming much more manageable at the end of the year. This has lessened concern about gaining access to needed gallons and sparked aggressive price pressure in all ethanol markets.
Ethanol futures prices have fallen 64 cents per gallon over the last month. This has buyers, sellers and analysts looking away from the corn market and more at RBOB gasoline and energy market moves.
Currently spot month ethanol prices are still holding an 8 cent premium to the spot RBOB gasoline contract. This relationship is likely to erode after the first of the year, as demand for ethanol will start to lessen if ethanol supplies are not priced under gasoline market prices in the long term.
Given the current softness in gasoline prices, ethanol prices could see additional declines over the next several weeks.
Gasoline Prices (By Region) |
||
REGION |
SPOT |
RACK |
West Coast |
$2.0127 |
$1.6831 |
Advertisement
Midwest
$1.9875
$1.8367
East Coast
$2.0825
$1.7521
Front Month Futures Price (RBOB) $1.5350
Ethanol Prices (By Region) |
||
REGION |
Advertisement
SPOT
RACK
West Coast
$1.7750
$1.9500
Midwest
$1.7500
$2.0477
East Coast
$2.0700
$2.4493
Front Month Futures Price (AC) $1.6150
The U.S. exported 31,160.5 metric tons of biodiesel and biodiesel blends of B30 and greater in May, according to data released by the USDA Foreign Agricultural Service on July 3. Biodiesel imports were 2,226.2 metric tons for the month.
CARB on June 27 announced amendments to the state’s LCFS regulations will take effect beginning on July 1. The amended regulations were approved by the agency in November 2024, but implementation was delayed due to regulatory clarity issues.
Legislation introduced in the California Senate on June 23 aims to cap the price of Low Carbon Fuel Standard credits as part of a larger effort to overhaul the state’s fuel regulations and mitigate rising gas prices.
The government of Brazil on June 25 announced it will increase the mandatory blend of ethanol in gasoline from 27% to 30% and the mandatory blend of biodiesel in diesel from 14% to 15%, effective Aug. 1.
The U.S. EIA reduced its 2025 and 2026 production forecasts for a category of biofuels that includes SAF in its latest Short-Term Energy Outlook, released June 10. The forecast for 2025 renewable diesel production was also revised down.