AMIS > Market monitor > Ethanol Update

Download the Monitor

AMIS Market Monitor

last release: April 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. 

  • Maize prices moved sharply higher in March as US maize exports were strong and concerns about the size of the Argentine crop supported prices. Prices also moved up sharply on 29 March with the release of US crops Planting Intentions which indicated farmers intend to plant less maize than was anticipated by the market.
  • Ethanol spot and futures prices rose, but at a slower pace than RBOB gasoline futures, resulting in an ethanol to RBOB price ratio of under 78 percent, down from last month and significantly lower than last year.
  • DDGs prices continued to sell at a premium to maize on a weight basis (119.5 percent in March), supporting ethanol processor returns.
  • Ethanol production margins improved slightly in March as ethanol receipts increased more than maize costs, resulting in a modest growth in returns.
  • The annualized production pace fell in March but remained above 16 billion gallons.