US ethanol spot prices fall as market eyes hike in imports

Houston (Platts)--29Mar2007

Ethanol spot prices in the US fell Wednesday, driven down in part by the
anticipation of increased imports from Brazil.
In New York Harbor, spot barge volumes were offered at $2.39/gal for
delivery on any April dates, off about 6 cents/gal from Tuesday. Houston was
off about 7 cents/gal as well, rated $2.44/gal for prompt barrels. Later April
barrels were offered as low as $2.40/gal.
Gasoline finished lower overall in many spot markets, as the NYMEX front
month RBOB contract came off 1.58 cents/gal. But over the past week, the NYMEX
front-month RBOB contract has been up just over 12 cents/gal, while in the
same period, New York Harbor ethanol has fallen about about 19 cents/gal, to
$2.39/gal.
The NYMEX RBOB settle at $2.057/gal Wednesday was about 34 cents/gal
below spot New York ethanol, under the 51 cent/gal tax break for sellers of
gasoline at the retail level.
Rack prices have been off over the last seven days as well in the
Midwest. Des Moines, a benchmark market, has seen its average unbranded rack
prices fall about 3 cents/gal to $2.24/gal. In the same time period,
conventional regular gasoline in Des Moines has increased 8 cents/gal to
$2.08/gal.
There has been no one overriding reason behind falling ethanol spot
prices, but some traders saw the drop as a reaction to an increase in cargo
imports as Brazil enters its spring ethanol producing season. So far, the
volume of imports offered does not seem excessive, trading sources said.
--Robert Sharp, robert_sharp@platts.com