All US ethanol regions on Monday were assessed within 10 cents of their previous assessment for the first time since March 11, as volatility that has plagued the market for two months softened.
The front-month New York Harbor ethanol assessment shed 9 cents to $3.24/gal, while the Chicago Argo assessment slumped 3.5 cents to $2.9750/gal. Other markets moved slightly higher, while the California rail car assessments were neutral.
The last time no single Platts US ethanol assessment moved at least 10 cents, up or down, was March 11. Platts has 11 US ethanol assessments across six markets.
"It has been nuts, to say the least," one ethanol trader said.
The Chicago Argo ethanol assessment finished a wild week, up 20.5 cents at $3.01/gal on Friday. That came after the sharpest two-day decline since the assessment began in 2003, when Argo plunged 95.5 cents from Tuesday to Thursday. Last Monday, Chicago Argo ethanol assessment soared 14 cents to $3.76/gal, the highest level since July 5, 2006.
Now nearly a week removed from the most recent stocks and production data from the US Energy Information Administration, which has been a driving force in price volatility in recent weeks, prices might have finally found a relatively comfortable level, one source said.
"The bids and offers just weren't moving much today," one ethanol broker said. "Maybe we'll stay this way until the new stats come out Wednesday, but I wouldn't put money on it."
The bearish reaction seen last week was triggered by the EIA data, which showed weekly US ethanol production up 37,000 b/d to a 14-week high of 922,000 b/d. The report also showed the first ethanol imports into the US in more than six months. For the reporting week ended March 28, ethanol imports were reported at 11,000 b/d, exclusively into PADD I, which represents the US Northeast. Previously, no ethanol imports were reported for 26 consecutive weeks.
As for this week, most sources expect production to taper slightly, stocks to continue to improve and imports to continue to swell.