After EIA reported a 351,000bl draw in ethanol stocks versus a smaller increase in production, ethanol prices went higher, bringing Chi Platts up to $1.61/gal for prompt transfer. The gains still trail soaring Brazilian anhydrous ethanol price moves WoW which have seen levels soar to over $700/m3 following gains in Brazilian hydrous ethanol, leaving the arbitrage to the US even further out of reach. With no recent Brazilian cargoes fixed to California, Houston ethanol traders have been focusing outbound flows towards China, Brazil, Peru and India. Enquiries are also being shown on freight to the Far East for the coming months.
In contrast to ethanol price strength, California biodiesel prices are coming under pressure for Q4 transfer, with talks stretching into the end of this year. B99 discussions for the California market have dipped to $1.10-$1.20/gal under ULSD on a creditless/rinless basis, reflecting the looming 2016 blenders’ credit cutoff as well as CI score adjustments for next year.