REX - Ethanol Margins Are Flying High But Potentially Not For Much Longer

The improved operating conditions that U.S. corn ethanol producers first began to benefit from in May remained present in June. The prices of gasoline and, by extension, ethanol have mostly recovered from the lows that were set in late March/early April, whereas the price of corn has continued a steady decline that began in February (see figure). These developments have in turn pushed corn ethanol production margins up to levels that were last seen in Q4 2019 (see next figure).

Data by YCharts

Production margins at a hypothetical dry mill corn ethanol facility in Iowa.

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