E85Forum.com

specialgreen · Last edited by specialgreen on Sun Apr 02, 2006 10:58 am; edited 1 time in total

EDIT: this topic has been moved from the "Nuts and Bolts" forum to the main discussion forum, because it ended-up being a thread about futures/commodity pricing versus terminal, rack (spot/contract), and pump pricing.

The portal page http://e85forum.com now has a commodity price chart comparing ethanol, unleaded, corn and natural gas:

Revision · Joined: 14 Sep 2005 Posts: 194 Location: Carol Stream, IL

I wonder if this will work?

Graph removed because the California.gov webadmin finally noticed...

Revision · Joined: 14 Sep 2005 Posts: 194 Location: Carol Stream, IL

Ok.. it works..

Now someone explain to me the difference in commodity pricing and terminal pricing...

(The image should update as the California Energy Government page updates)
(At least until the web admin at the site notices...)

specialgreen · Posted: Sat Apr 01, 2006 10:16 pm Post subject:

The graph at the top reflects prices at the Chicago Board of Trade (e.g. futures). Here's a comparison of the rack prices you posted, with the the commodity trading prices I posted:

It looks like the rack prices have smoother motion. Also, traded prices of ethanol futures have risen 6% in the last two weeks, but rack prices may (apparently) still be on the decline.

Revision · Joined: 14 Sep 2005 Posts: 194 Location: Carol Stream, IL

Ok. I think I figured it out.
Commodities are prices that the brokers try to guess that the product will be selling in the future.
Terminal prices should be what it is actually (on average) selling for. Which explains why the second graph is more jagged and lagged in terms of updates.

Seems that the commodities guys either have a firm grasp of what the pricing will be or are the ones who are causing all the prices to inflate...

1outlaw · Joined: 15 Feb 2006 Posts: 89 Location: Central Wisconsin

I assume from looking at the terminal price chart we are looking at petroleum company/ pipeline load racks for tanker trucks to pick up gasoline, diesel, and ethanol for blending. These terminal prices are substantially higher than ethanol plant rack price. Spot at ethanol plants is running about $2.20-2.35 vs. for instance WI. oil terminal's $2.68. Long term contracts feeding those oil terminals range from $1.40- $2.25. These prices would include road tax after blending.

specialgreen · Posted: Sun Apr 02, 2006 10:08 am Post subject:

Commodity prices versus pump prices at the Holiday gas station in Eagan, Minnesota:

(drop-outs in the lines are for times when I have 7 days or more of no data)

It appears that pump price of ethanol at this filling station tracks the same station's pump price of gasoline pretty closely, and does not change with either corn or ethanol commodity pricing. One interesting thing is that when the CBOT commodity ethanol price went up in February, and gasoline went down, the pump prices of both at this filling station did not move much.

In the top graph (at the start of this topic), it appears that commodity corn pricing may have a correlation with commodity ethanol. I wonder who is tracking who? With enough corn going to make ethanol, and ethanol pricing influenced by gasoline, we could see the price of corn track the price of gasoline.

1outlaw · Joined: 15 Feb 2006 Posts: 89 Location: Central Wisconsin

At this point corn prices are driven more by weather, demand, export, and expected carryover from 1 crop year to the next. Ethanol is using only about 15% of the crop- in the future this will be a far greater factor in prices of corn. Katrina and rail car shortages had a huge effect on depressing corn prices this year by limiting exports.

Right now corn has no effect on ethanol prices as all plants are running full production- yet for the long run -cheap corn and high ethanol prices are bringing investors running to start plants that will take 2-3 years to build- thus the impact is long term.

The plant price of ethanol is somewhat related to gasoline price but much less than terminals where oil companies tend to price it near gasoline and it's trends. In Minnesota where all terminals carry it you will find it priced far more competitively vs. WI. where ethanol is not mandated and only 1-2 companies handle it.

Revision · Joined: 14 Sep 2005 Posts: 194 Location: Carol Stream, IL

The CA.gov webadmin hasn't noticed we are linking his picture yet. So the graph in the second post is still self updating. Those ethanol prices don't really paint a pretty picture though. Sad

Revision · Joined: 14 Sep 2005 Posts: 194 Location: Carol Stream, IL

Link to California Website with Ethanol Spot prices:

http://www.energy.ca.gov/gasoline/graphs/ethanol_18-month.html

Notice that Ethanol prices in Illinois have dropped dramatically. I don't really have any good reasons as to why this is happening now, but good news for us all.

Revision · Joined: 14 Sep 2005 Posts: 194 Location: Carol Stream, IL

http://www.axxispetro.com/ace.shtml

Average Ethanol Rack Prices by state.

Iowa: 2.5319

Illinois: 2.4997

Kansas: 2.7245

Minnesota: 2.6644

Missouri: 2.6667

North Dakota: 2.6960

Nebraska: 2.7623

South Dakota: 2.6768

Wisconsin: 2.6895