US ethanol markets across the board dropped to 11-week lows Monday on a massive drop in corn futures and length in supply, sources said.
Chicago Argo ethanol was assessed down 10.5 cents/gal, or 4.3%, from Friday to $2.3175/gal, while the Chicago Rule 11 ethanol assessment fell 10 cents/gal to $2.31/gal. New York Harbor ethanol was assessed down 12 cents/gal to $2.38/gal for any-September delivery and $2.3950/gal for any-October.
The US Gulf Coast ethanol assessment plummeted 15 cents/gal to $2.3595/gal, making for a seven-session decline.
Specifically, Chicago Argo, Rule 11, New York Harbor and US Gulf Coast ethanol assessments were at their lowest levels since July 2, when they were at $2.2650/gal, $2.2850/gal, $2.36/gal and $2.3150/gal, respectively.
The US West Coast ethanol assessment sank 10 cents/gal to $2.46/gal, the lowest level since July 3, when it was at $2.4550/gal
The considerable drop in US ethanol markets was attributed by a source to a "really big fall in corn, and we are still long" on ethanol supply in the US.
December corn futures on the Chicago Board of Trade settled down 34 cents/bushel, also a fall of 4.3%, to $7.48/bushel -- the lowest settlement for the front-month contract since July 13 -- on private reports that showed better-than-expected yields for the current corn crop in Minnesota and northern Iowa, agriculture analysts said.
Regarding length of supply, US ethanol stocks for the reporting week ended September 7 rose 221,000 barrels to a six-week high of 18.953 million barrels, according to the latest weekly data released Wednesday by the Energy Information Administration.
Conversely, the EIA reported that the four-week rolling average of gasoline demand sank 154,000 b/d to a month-low of 9.004 million b/d after reaching a 2012 high of 9.158 million b/d the previous week. Gasoline demand was only 0.08% below where it was at this time last year. Year-to-date, current-year levels trailed that of last year by 4.5%.
Adding to well-supplied markets in the US was market talk of Brazilian imports during the summer, although import volumes were heard to be declining the rest of the year.
"I saw some [ethanol imports] for September through November, but much less than months before. Additionally, there were some delays in Brazil due to rains at the beginning of their [harvest] season, and also due to the [port workers'] strike last month, so some imports [were] concentrated in mid-July and mid-to-late August," said an ethanol trader who is active in the US and Brazilian markets.
