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Ethanol Margins "Extremely Strong"
Corn Prices, Clearing Transportation Delays Influence Ethanol Profits
Todd Neeley DTN Staff Reporter
Fri May 23, 2014 01:39 PM CDT

OMAHA (DTN) -- Though U.S. ethanol plant profits have come down a little since the start of spring, the latest look at DTN's hypothetical ethanol plant shows profits remain strong ahead of the Memorial Day weekend and summer driving season.

DTN Ethanol Analyst Rick Kment said ethanol profitability remained "extremely strong" in May, although ethanol prices are starting to stabilize after significant price shifts through late spring.

In 2006, DTN created a hypothetical, 50-million-gallon Neeley Biofuels ethanol plant to track profitability. Kment has continued to track the plant's profitability and writes about it in his daily ethanol comments.

Neeley Biofuels is posting a net gain of 67.1 cents per gallon. The hypothetical plant is used to measure how changes in commodity markets might affect actual plant margins.

Ethanol rack prices adjusted higher as recent support in ethanol futures and corn prices helped to put solid price gains in most state average prices. National average rack ethanol prices increased 1.71 cents per gallon, closing at $2.7114 a gallon. This continues to put the focus on increased market activity and growing demand through and after the Memorial Day holidays. The continued but light support in corn prices is expected to help solidify additional support in most state rack markets over the next week also.

Spot ethanol prices trickled higher in light trade Friday. Most of the needed buying interest took place during the first half of the week, with the scattered trade seen Friday focusing on the recent support in ethanol futures and potential demand support surrounding the holiday weekend. Prices were reported steady to 7 cents per gallon higher with most locations posting gains of 2 to 3 cents per gallon.

Ethanol futures followed corn and energy markets higher late in the week with June futures leading the market higher with a gain of 1.1 cents per gallon. This closed front-month futures at $2.325 a gallon, with other nearby contracts also posting narrow gains as buyers continue to focus on holiday demand support even though overall trade volume remained extremely light. July-through-December contracts all posted gains from 0.6 to 0.9 cents per gallon, although most traders are focusing on doing most of the major trade activity needed near next week once markets open Tuesday.

Nor. Cal $2.61
Pacific Northwest $2.57
http://www.progressivefuelslimited.com/Web_Data/pfldaily.pdf …