The Corn – Gasoline Connection

Ethanol prices and corn processing margins have stabilized in the past week, but ethanol is still trading at a  substantial premium to gasoline. 

Corn used as fuel feed-stock dropped off in March and weekly data reveals the negative trend has  accelerated in  the last month. Ethanol exports have also declined putting additional pressure on corn processors. 

The ethanol industry won’t make a sustained recovery until the price of gasoline reestablishes a more normal premium to ethanol.

The economy will likely  stage a recovery this summer and fall, as relates to the corn market the price of gasoline relative to ethanol will be a key indicator to follow.