The RBOB gasoline-to-ethanol price spread remains at the widest level that it has been in more than three months. With ethanol futures trading at a 61.8-cent-per-gallon discount to the RBOB gasoline market, blending activity continues to be economically beneficial, especially for blenders that are not at the blending limits.
The building pressure in the corn market continues to have a heavy impact in the overall movement in the ethanol market.
At the same time last year, the price spread was at 50.8 cents per gallon, which is an 11-cent improvement over levels currently seen.
If additional pressure develops in the RBOB gasoline market during the next two weeks, and corn markets continue to remain under pressure, the discount to gasoline prices may fall.
But it is likely that the gasoline-to-ethanol relationship itself will not be able to narrow the price gap, considering that ethanol inventory levels remain so large.
Rick Kment can be reached at firstname.lastname@example.org
© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.