Plunging Corn Futures Push Ethanol Crush Margin Higher

Jul 15, 2020

The US ethanol crush margin on July 13 rose to 34.41 cents/gal, up by 5.16 cents since S&P Global Platts last published its crush margin tracker on July 6.

The crush margin gained due to a sizable decline in corn futures, and a small gain in ethanol prices

Platts assessed Chicago Argo ethanol at $1.5370/gal on July 13, up 70 points since July 6. Argo prices reached a seven-month high on July 8 at $1.6060/gal as thin inventories forced buyers to pay substantial premiums for the biofuel. However, those gains virtually evaporated by July 13.

Front-month CBOT corn futures, on the other hand, slumped 12.5 cents to $3.34/bu, compared to July 6. After seeing a brief rally on July 6 due to concerns about hot, dry weather, the US Midwest saw heavy rains for the latter part the week. The plentiful precipitation eased concerns about the harvest and pulled prices lower.

The crush margin measures the cost of ethanol against the cost of feedstock corn used to produce the biofuel. A simple crush margin can be calculated by dividing the cost of corn per bushel by 2.8, the number of gallons of ethanol that a bushel of corn can produce. The resulting number is the cost of corn per gallon of ethanol.

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Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.