The backwardation pricing structure for the New York Harbor ethanol market grew 35 cents Friday to Monday, to 39.5 cents/gal, the largest backwardation structure recorded by Platts for the New York Harbor ethanol market.
Platts first started assessing New York Harbor ethanol for two months forward on September 1, 2010.
The previous record high was at 39 cents/gal on November 23, 2011. New York Harbor ethanol was assessed Monday at $2.7250/gal for any-September, with trades heard before the assessment process on an FOB NYH basis for any-September at $2.75/gal and $2.80/gal, followed be a deal heard off-screen during the assessment process at $2.72/gal.
New York Harbor ethanol assessed Monday at $2.33/gal for any-October, with deals heard in the morning on an FOB NYH basis for any-October at $2.33/gal, $2.36/gal, $2.34/gal and again at $2.33/gal.
An ethanol trader attributed the record-high backwardation structure in New York Harbor ethanol pricing to tight near-term corn supplies.
"There is a ton of backwardation because we are running out of corn today, and [we are] having trouble buying corn to make ethanol, but there is the perception that there will be so much ethanol around once the corn harvest actually starts, which is keeping a lid on the back," he said.
The corn harvest in the US typically starts in September of each year, sources said.
September corn futures on the Chicago Board of Trade settled Monday at $5.1575/bushel, up 20.25 cents from Friday, on a combination of tight near-term supplies, improving demand and weather forecasts for hot and dry weather in the Midwest, the largest corn-producing region in the US by volume, analysts said.
