The Argo ethanol market for prompt delivery traded as low as $1.4950/gal Tuesday morning as the terminal is due to begin rejecting delivery trucks at noon CST amid full storage, market sources said.
"It's not holding in very well," said one source.
S&P Global Platts assessed Argo, a benchmark for physical US ethanol, at $1.56525/gal Monday.
Kinder Morgan Monday told customers that ethanol truck deliveries to its Argo, Illinois, terminal must be diverted to its nearby Stony Island storage facility amid tight ethanol storage.
"Inbound truck movements were diverted in order to balance inventory between terminals because inventory at the Argo terminal is at peak levels," company spokeswoman Sara Hughes said in an email to S&P Global Platts.
Sources said Argo is still due to take rail deliveries, suggesting that the terminal is not completely full but that Kinder Morgan is making sure there is enough room for the larger deliveries.
The company did not say when deliveries would resume, but that it would notify customers when trucks can return to the Argo terminal.
Hughes said that both Stony Island and Argo are part of Kinder Morgan's "Fuel Grade Ethanol Fungible System." So a company could trade at Argo even if deliveries are heading to Stony Island.
US ethanol stocks have been rising for the past five weeks, as shown in weekly Energy Information Administration data. Inventories added 215,000 barrels to 22.085 million barrels in the week ended February 3.
Midwest stocks, the region under which Argo falls, hit an all-time high of 7.819 million barrels in the same week.
Argo is the busiest hub of physical ethanol trade in the US, so a full terminal can pressure prices.
The terminal last reached its ethanol storage capacity in March 2016, which sent prices tumbling.
