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U.S. ethanol margins slumped to an eight-year low for mid-March, with Corn Belt margins reaching minus 6 cents per gallon before a slight recovery. Producers blame lower fuel demand from the coronavirus and the oil price collapse, with some saying at least half the industry is losing money.
Weak margins make plant shutdowns more likely, which would cut corn grind and corn demand. Lower gasoline prices also reduce the value of the ethanol blend.
hydrocarbonprocessing.comMar 13, 2020After 301 past bearish macro events, Corn moved a median -0.1% over 5 sessions (47% higher; middle half -2.2% to +1.3%), and +0.2% over 20.
After 565 past bearish macro events, Crude Oil (WTI) moved a median -1.4% over 5 sessions (41% higher; middle half -5.9% to +3.0%), and -0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Ethanol margins at an eight-year low signal weaker corn grind demand from the oil collapse and coronavirus, bearish for corn.
