US Ethanol Prices Slide 2.1% in Early February as Output Falls, Policy Hopes Build

US ethanol prices decreased in early February due to more negative market fundamentals than positive expectations for federal biofuel policy changes. There was a decrease in production; there was less caution about blending; and there continued to be uncertainty about demand for ethanol in the near term. These negative market conditions caused ethanol prices to decrease. Even though this happened, ethanol manufacturers and agricultural advocacy groups are increasing their intensity in trying to secure long-term policies that will support expanded access to higher levels of ethanol in motor fuels through blending use.

US ethanol prices dropped by *.** in early week of February, as reduced production of fuel ethanol and weak cash market sentiment contributed to the decline in price. The decline in production occurred after fuel ethanol production fell to its lowest level in several months at the end of January because of...