Ethanol producers are generating strong profits, said Tomm Pfitzenmaier, analyst for Summit Commodity brokerage, Des Moines, Iowa.
"Margins are as wide as 90 cents to $1.00 on a gallon of ethanol," Pfitzenmaier said. "Producers are trying to take advantage of this as much as they possibly can."
Spot ethanol prices surged 11.5 cents per gallon Tuesday morning at the Argo hub near Chicago, talked at a $2.48 to $2.55 bid ask while prices were up 9.5 cents at the New York Harbor, pegged at $2.80 gallon. Trade sources said tight supply in both markets is driving spot prices higher.