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US ethanol crush margin falls to three-week low

Houston — The US ethanol crush margin reached a three-week low Friday, with ethanol prices falling and feedstock corn futures jumping in the last several sessions.

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The crush margin fell to 5.94 cents/gal Friday, a decline of 2.7 cents day on day and its lowest mark since reaching 4.45 cents/gal on April 6.

Ethanol prices have fallen every day but one this week as the seasonal turnaround season ends.

Ethanol prices in the past few weeks have been buoyed by falling production as plants were idled for spring maintenance. But many plants are expected to be going back online in May, meaning a likely end to output drops.



In addition, ethanol stocks last week saw a large build, the first in six weeks.

S&P Global Platts benchmark Argo assessment has fallen 6.25 cents to $1.4505/gal over the last six trading sessions.

On the other hand, feedstock corn futures have risen sharply in the last week. Concerns about the impact of dry weather on Brazil's second season corn crop and wet weather's impact on the US corn planting season have boosted prices. Front-month corn futures have risen 13 cents in the last six sessions to $3.8950/bushel.

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.

--Wes Swift, wesley.swift@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com