Ethanol, Fuels and Co-Product Pricing
Market Outlook: U.S. ethanol prices are higher to start the week with nearby CBOT ethanol futures up 2.3 percent from Friday (when they finished the week down 1.2 percent) while Midwest wholesale rack ethanol prices are up 0.5 percent at 41.97 cents/liter (158.89 cents/gallon).
FOB Houston ethanol prices finished last week 0.6 percent higher and are up an equal amount through Tuesday. FOB Houston prices are quoted at 41.122 cents/liter (155.663 cents/gallon), an increase of 0.328 cents/liter (1.24 cents/gallon).
FOB Santos, Brazil ethanol prices saw stability return to the market last week as the market ended steady/higher (up 0.4 percent) by Friday’s close. This week, prices are up another 0.6 percent at 51.980 cents/liter (196.765 cents/gallon). Brazilian sugar cane harvest is nearly complete which will likely reduce or end the harvest-time pressure on sugar and ethanol prices. Seasonally, FOB Brazil ethanol prices rebound heading into June/July/August.
The FOB Gulf-Santos, Brazil ethanol price spread likely established its seasonal low last week when it fell 0.7 percent. This week, however, the spread is widening to favor U.S.-origin product and is 0.8 percent higher. The latest indications put the spread at -$10.858 cents/liter (41.103 cents/gallon).
MTBE prices were higher last week (up 0.6 percent by Friday) and are extending those gains this week. MTBE FOB U.S. Gulf prices are 2.3 percent higher through Tuesday’s trading and are at a 22.465 cents/liter (85.04 cents/gallon) premium to FOB Houston ethanol.
BTX component prices are higher to start the week, following last week’s sharply higher trade. Benzene prices finished last week up 1.4 percent and are up another 1.5 percent so far this week. Toluene prices gained 2.7 percent last week and are 3.5 percent higher this week, while xylene prices rose 1.2 percent last week and are 2.6 percent higher this week. The estimated weighted average aromatic price is currently 77.28 cents/liter (292.53 cents/gallon), up 2.8 percent from Friday’s close. The weighted average BTX price is 36.115 cents/liter (136.86 cents/gallon) higher than FOB Houston ethanol prices.
Gasoline and petroleum products are mostly steady/higher in early week trading, following last week’s sharp gains. RBOB futures are up 0.5 percent from Friday’s close while FOB Gulf/Houston prices for 84 octane RBOB and 87 octane CBOB are 0.6 and 0.3 percent higher, respectively. WTI crude oil futures are up $0.31/barrel from Friday’s close while Brent futures are $0.61/barrel higher.
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