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AMIS Market Monitor

last release: June 2018

Ethanol Update

Chart description

Chart description

The ethanol margin gives an indication of the profitability of ethanol production from maize in the United States. It uses current market prices for maize, Dried Distillers Grains (a valuable by-product of maize-based ethanol production) and ethanol, with an additional $0.55 per gallon of production costs. 

  • US maize prices increased in May underpinned by strong export demand.
  • DDGs prices remained strong relative to maize, supported by firm domestic soybean meal prices.
  • Ethanol prices were nearly flat in the futures market and down in the cash market despite increasing oil prices which resulted in ethanol to gasoline futures price ratio of 67 percent, near energy equivalence.
  • Falling cash ethanol prices and rising maize costs more than offset increasing DDGs prices, trimming producer production margins.
  • Ethanol production rose in May and on an annualized basis moved above 16 billion gallons a year.
  • The certificates of compliance with the US Renewable Fuel Standard known as RINs hit USD 0.22 cents at the end of May, the lowest since November of 2013 on news of significant numbers of small refinery waivers being granted by EPA, reducing the blending requirements.