Houston — Chicago Argo ethanol swap prices dropped sharply Wednesday after a government report showed ethanol production in the US at a record high.
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The report from the US Energy Information Administration also included a 500,000-barrel build in ethanol inventories.
Prices for the January ethanol swap traded as low as $1.31/gal shortly after the EIA released the report. S&P Global Platts assessed the January swap at $1.32/gal. Platts assessed the swap Tuesday at $1.36/gal.
Platts assessed the February ethanol swap at $1.3450/gal, down 3 cents.
Ethanol production rose 42,000 b/d in the week ended December 1 to 1.108 million b/d, the EIA report said, breaking a mark set two weeks earlier, when production topped 1.074 million b/d.
Prices have tumbled for Chicago Argo ethanol, which has seen high levels of production for an extended period. Sources have said recently that Kinder Morgan has sent notices that space at the Argo ethanol terminal is limited, piling further pressure on prices.
Platts' benchmark Chicago Argo assessment tumbled 3.9 cents Wednesday to $1.3155/gal, the lowest since January 14, 2016.
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