REX - Ethanol Demand Continues To Collapse But Production Margins Are Stabilizing
Ethanol producers continued to face extreme headwinds last week as ethanol prices continued their march downward, sliding another 11% between Monday and Friday. To put matters in perspective, Friday's price of $0.71/gallon was just over 50% below the lowest price recorded during the depths of the Great Recession. The reason for ethanol's rapid decline is the similar collapse to the price of gasoline that has occurred as the U.S. social distancing response to the COVID-19 pandemic has expanded throughout the country (see figure). Ethanol displaces gasoline demand and competes directly against that fuel on price