Corn Ethanol Margins – 06/13/2021

The rising value of corn ethanol has sustained the corn crush industry at a  time of a tight old crop corn supply usage balance. The value of DDGS ( a by-product of the corn crush process used as animal feed) has also moved higher since harvest, but at a much slower pace than ethanol. 

Corn ethanol has been subsidized for many years as a way to reduce the corn surplus,  to make the US more energy independent, and to increase the use of renewable fuel. Many observers believe Federal assistance to the ethanol industry has outlived its usefulness. Major reform would be bearish for corn prices, but we are sceptical major changes will be accomplished.