The US ethanol crush margin on July 27 rebounded from the previous week's plunge, rising to 13.58 cents/gal, an increase of 6.51 cents since S&P Global Platts last published its crush margin tracker on July 20.
A rally in ethanol prices combined with a fall in corn futures to lift the margin, which sank to single digits on July 17.
Platts assessed Chicago Argo ethanol at $1.2965/gal on July 27, up 5.35 cents since July 20. Ethanol prices received a boost July 22 after the US Energy Information Administration released its weekly report showing ethanol production declined for the first time in 12 weeks. Stocks also shed 807,000 barrels. Both numbers were well below market expectations, and sent ethanol prices skyward.
S&P Global Platts Analytics forecast that production will rise to 954,000 b/d in the upcoming July 29 report.
Front-month CBOT corn futures, on the other hand, dropped, falling 3.25 cents from July 20.
The crush margin measures the cost of ethanol against the cost of feedstock corn used to produce the biofuel. A simple crush margin can be calculated by dividing the cost of corn per bushel by 2.8, the number of gallons of ethanol that a bushel of corn can produce. The resulting number is the cost of corn per gallon of ethanol.
