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AMIS Market Monitor

last release: Feb 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. 

  • The ratio of nearby ethanol futures to RBOB gasoline fell to nearly 73 percent; while RBOB gasoline futures surged, ethanol futures only rose slightly. 
  • Ethanol spot and nearby futures prices slightly increased in January; RBOB gasoline prices continued to climb, supported by rising crude oil prices. Ethanol futures prices averaged 50 cents lower than gasoline. 
  • Maize prices have been trading in a fairly narrow range over the last several weeks. 
  • Ethanol margins, although slightly negative, have improved from last month supported by an increase in the price of DDGs relative to maize prices. 
  • DDGs prices have risen relative to maize for the last several weeks. The increase in relative DDGs prices has helped support the producer margin.
  • Ethanol production was slightly lower during the first half of January, representing an annualized production pace of 16.1 billion gallons; still below last month but slightly above last year and well above the annual mandate.