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The Changing Ethanol Market: Implications For Stakeholders
By Mr Ethanol | June 20, 2007
Ethanol Producer Magazine:
Many in the ethanol industry believe ethanol prices are intrinsically related to gasoline prices since ethanol is blended and sold as a gasoline component. However, ethanol prices are fundamentally based on ethanol supply and demand balances. Sometimes the balance creates a link between ethanol and gasoline prices. Other times it breaks the link. Understanding when and how these relationships change helps ethanol producers make better decisions about their ethanol production and marketing plans.
This article uses the Chicago-area market as the reference for ethanol and conventional gasoline spot prices. Chicago is used because it’s the only Midwest point of the four major regional gasoline markets, and the Chicago Board of Trade (CBOT) ethanol futures contract specifies a Chicago-area terminal as its delivery point. Comments about the Chicago market apply to the other major regional markets as well as the rest of the United States. The other major regional gasoline markets are the Gulf Coast, New York Harbor and Los Angeles.
Topics: BizOp, Ethanol, Industry, Investing, Market, Money, News, Stock Market |
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