S&P Global Platts Thursday assessed Chicago Argo ethanol at a nearly two-year high, as low stocks and robust exports continued to support the market.
Argo, a benchmark for physical US ethanol, was $1.7580/gal Monday, the product's highest level since December 15, 2014, when it was $1.93/gal.
It has continued to strengthen as bullish data was released, supporting prices.
Monthly export data from the US Census Bureau released Monday showed that the US exported 131.6 million gallons of ethanol in October, the highest monthly total since December 2011.
Exports through November remained strong, with sources saying companies were shipping around 90,000 b/d. Market participants expect export demand to remain strong through the end of the year and into the first quarter of 2017.
Energy Information Administration data also bolstered prices.
The weekly EIA data showed domestic stocks added just 82,000 barrels in the week ended December 2. Market participants had expected a larger build.
As producers exited seasonal maintenance, sources expected production to rise and stocks to build. But ongoing demand from foreign buyers has kept stocks under control.
Production also avoided racing upward as quickly as some expected. Some traders were expecting run rates to race past 1.020 million b/d nearly a month ago. But it was only in the most recent week of data that output rose beyond that mark, climbing 11,000 b/d to 1.023 million b/d.
Part of production's slow return to high output could have to do with export-grade ethanol taking longer to produce, forcing plants to slow down production. But some plants may have experienced late turnarounds.
