Ethanol crush margin falls again on rising corn

Houston — The US ethanol crush margin fell 1.19 cents/gal Oct. 12 from when S&P Global Platts last published its crush margin tracker on Oct. 5.

The crush margin dipped from 5.76 cents/gal to 4.57 cents/gal on Oct. 12, as corn future prices surged for the second straight week.

Front-month CBOT corn futures gained 9.5 cents to $3.89/bu between Oct. 5 and Oct. 12. Corn futures rose to $3.95/bu on Oct. 9, the highest level since early October 2019. A bullish WASDE report showing a steep decrease in several metrics for US corn lifted prices.

Platts assessed Chicago Argo ethanol at $1.4350/gal on Oct. 12, up 2.20 cents since Oct. 5. Ethanol prices stalled for most of last week as buyers and sellers refused to move from their bids and offers, creating thin liquidity. However, prices jumped 1.9 cents on Oct. 9, in tandem with the corn rally.

The crush margin measures the cost of ethanol against the cost of feedstock corn used to produce the biofuel. A simple crush margin can be calculated by dividing the cost of corn per bushel by 2.8, the number of gallons of ethanol that a bushel of corn can produce. The resulting number is the cost of corn per gallon of ethanol.