The price of New York Harbor ethanol barges for July has weakened, moving to flat against its August counterpart, market sources said Monday.
"July seems long here," said one source, referring to abundant product in the region.
Stocks in the East Coast, the larger region of the US, which includes New York Harbor, grew 170,000 barrels to 7.624 million barrels in the week ended July 1, according to Energy Information Administration data released last Wednesday. That figure is 801,000 barrels more than the same week last year.
July barges had maintained as much as a 1-cent premium to August in recent weeks.
Ethanol commonly enters seasonal backwardation in the summer as gasoline reaches its annual peak. But the pressure from the oversupply of product in the market is keeping the structure flat.
The weakness in the front-month is unlikely to disappear soon, the source went on to say. Producers are likely to continue producing at high rates as a 20% drop in corn prices since June 17 has widened production margins.
Producers averaged 984,00 b/d in the week ended July 1, with an average of 996,000 b/d in the last four weeks of data.
