Pushed lower by a bearish ethanol stocks and production report, the S&P Global Platts benchmark Chicago Argo ethanol assessment dipped to its lowest level since mid-September.
Platts assessed ethanol at the Kinder Morgan terminal in Chicago at $1.3670/gal on Wednesday, down 3.35 cents. The assessment was the lowest since September 12, when Platts assessed the market at $1.3550/gal.
Argo ethanol, already slumping in the past two days because of a backwardated market, was pushed down further by the US Energy Information Administration's weekly ethanol stocks and production data. The report showed a build of 1.176 million barrels, the largest build since June 28, and the fifth-largest since the agency began recording such data in 2011.
Production also reached its highest level since June 28, rising 12,000 b/d to 1.072 million b/d.
One source called the report "pretty ugly," while another source described the fallout from the report as "catching knives."
Ethanol prices at the Chicago Argo terminal have seen marked swings in prices in the last few weeks. Market participants have blamed a steep backwardation between December and January values for the volatility, which has forced buyers to pay high prices, then turn around and search desperately for buyers for their product when demand was low.
Between November 19 and November 26, Argo prices rose from $1.5430/gal to $1.70/gal. Since then, Argo prices have slumped to $1.4340/gal Monday, when prices fell 5.85 cents, then slipped another 3.35 cents Tuesday after a lackluster corn crop supply and demand forecast from the US Department of Agriculture.
