Ethanol, Fuels and Co-Product Pricing
Market Outlook: U.S. ethanol prices are mixed to start the week with nearby CBOT ethanol futures down 1.9 percent from Friday (when they finished the week up 3.3 percent) while Midwest wholesale rack ethanol prices are up 0.6 percent at 41.97 cents/liter (158.86 cents/gallon).
FOB Houston ethanol prices finished last week 2.2 percent lower and are taking back some of those losses in early week trading. FOB Houston prices are up 1.0 percent from Friday at 41.013 cents/liter (155.25 cents/gallon), an increase of 0.394 cents/liter (1.49 cents/gallon).
FOB Santos, Brazil ethanol prices continued their seasonal decline last week, falling 1.8 percent by Friday’s close. This week, prices are down 0.4 percent at 51.247 cents/liter (193.990 cents/gallon). As noted in last week’s report, FOB Santos ethanol prices have fallen in recent weeks as Brazilian ethanol mills are prioritizing ethanol production over sugar amid the sugar cane harvest season. However, stability is likely to return to the market as the seasonal downturn looks nearly finished.
Lower FOB Gulf values and the continued weakness in Brazilian prices modestly narrowed the FOB Houston-Santos price spread last week. The spread fell 0.3 percent to -10.849 cents/liter (-41.070 cents/gallon) and is extending that trend this week. Prices show the spread narrowing 5.7 percent to -10.234 cents/liter (-37.740 cents/gallon).
MTBE prices were higher last week but are giving back most of last week’s gains through Tuesday’s trading. Last week, prices rose 1.0 percent by Friday’s close and are up 0.8 percent through Tuesday’s trading. MTBE prices are last quoted at 61.59 cents/liter (233.13 cents/gallon) and are valued at a 20.574 cents/liter premium (77.88 cents/gallon) premium to FOB Houston ethanol.
BTX component prices are higher to start the week, following last week’s mostly lower trade. Benzene prices finished last week down 1.5 percent and are up 0.8 percent so far this week. Toluene prices gained 0.5 percent last week and are 2.1 percent higher this week, while xylene prices fell 1.0 percent last week and are 0.6 percent higher this week. The estimated weighted average aromatic price is currently 74.75 cents/liter (282.95 cents/gallon), up 1.1 percent from Friday’s close. The weighted average BTX price is 33.735 cents/liter (127.70 cents/gallon) higher than FOB Houston ethanol prices.
Gasoline and petroleum products are mostly higher in early week trading, following last week’s gains. RBOB futures are up 1.8 percent from Friday’s close while FOB Gulf/Houston prices for 84 octane RBOB and 87 octane CBOB are 0.2 percent higher and 0.1 percent lower, respectively. WTI crude oil futures are up $0.98/barrel from Friday’s close while Brent futures are $1.69/barrel higher.
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