december 11, 2017 • volume 14, issue 50 - · pdf filematerial at argo had started to...

In Each Issue ...

Ethanol & Biodiesel Information Service is published by OPIS by IHS Markit company | www.opisnet.com | 888.301.2645

December 11, 2017 • Volume 14, Issue 50

See page 2 for more spot pricing locations

U.S. RINs (prices in U.S. $/RIN)

Fri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

U.S. Ethanol RINs

Current Yr 0.8700-0.8900 0.8600-0.8700 0.8350-0.8500 0.7700-0.8300 0.7700-0.8050 0.83500

Previous Yr 0.8650-0.8850 0.8550-0.8650 0.8300-0.8450 0.7650-0.8250 0.7650-0.8000 0.83000

U.S. Cellulosic RINs

Current Yr 2.9400-2.9800 2.9400-2.9800 2.9200-2.9400 2.9200-2.9400 2.9200-2.9400 2.94200

Previous Yr 2.8000-2.8400 2.8000-2.8400 2.8000-2.8400 2.8000-2.8400 2.8000-2.8400 2.82000

U.S. Biodiesel RINs

Current Yr 0.9900-1.0200 0.9650-1.0000 0.9500-0.9700 0.9000-0.9400 0.8800-0.9200 0.95350

Previous Yr 0.9500-0.9800 0.9250-0.9600 0.9100-0.9300 0.8600-0.9000 0.8400-0.8800 0.91350

U.S. Advanced Biofuel RINs

Current Yr 0.9800-1.0100 0.9550-0.9900 0.9400-0.9600 0.8900-0.9300 0.8700-0.9100 0.94350

Previous Yr 0.9400-0.9700 0.9150-0.9500 0.9000-0.9200 0.8500-0.8900 0.8300-0.8700 0.90350

January 2018 February 2018 March 2018 April 2018

CBOT 131.50 133.80 136.00 138.40

Settlement Thursday, December 7, 2017 Source: Chicago Board of Trade

Chicago (prices in U.S. $/gal.)


Ethanol 1.3000-1.3600 1.3450-1.3600 1.3500-1.3600 1.3100-1.3170 1.3050-1.3195 1.33265

DP ETH 1.2700-1.2900 1.3000-1.3500 1.3450-1.3550 1.3000-1.3100 1.2950-1.3125 1.31275

B100 SME 3.1900-3.2900 3.1400-3.2400 3.1600-3.2600 3.1100-3.2100 3.1500-3.2500 3.20000

RBOB Unl 1.6666-1.6941 1.6272-1.6372 1.6709-1.6809 1.6384-1.6584 1.7075-1.7175 1.66987

RBOB Pre 1.8866-1.9141 1.8547-1.8647 1.8984-1.9084 1.8659-1.8859 1.9350-1.9450 1.89587

CBOB Unl 1.6366-1.6641 1.6047-1.6147 1.6484-1.6584 1.6159-1.6359 1.6850-1.6950 1.64587

ULSD 1.8963-1.9213 1.8545-1.8595 1.8589-1.8689 1.7988-1.8088 1.8470-1.8570 1.85710

Chicago Rule 11 (prices in U.S. $/gal.)


Current Yr 1.3200-1.3400 1.3250-1.3350 1.3350-1.3450 1.3050-1.3150 1.2850-1.2950 1.32000

Ethanol Market Overview:

Plants push ethanol output to another all-time high

Bulk ethanol markets managed to demonstrate some resilience in both physical and paper markets early last week as they climbed off recent lows, but a midweek industry report that showed record-setting production for the second time in three weeks and higher stocks set the market back on its heels.

Most physical ethanol markets remained thinly traded through the latter part of last week, with quite a few market sources pointing to a reluctance to make any moves in the wake of a weekly Energy Information Administration report that sent bids sliding after it was released at midweek. Chicago-area spot trading, however, did find significant interest – first early last week when transfers that could be had a week out fetched up to $1.36/gal – and then at post-EIA-report prices that slumped as low as $1.31/gal.

The market remained unsteady into Thursday, with dead-prompt volume at the area’s Argo facility dipping under $1.30/gal for a time and reports of trading on transfers at midmonth sagging as low as $1.305/gal.

Some contango remained in the Chicago market. Before midweek, the curve for physical material at Argo had started to flatten as some talks indicated the prompt-to-any-December spread moving inside a penny. The latest talks, however, had that spread moving back out 1.5cts

Ethanol & Gasoline Component Spot Market Prices

Ethanol Futures (cts/gal contract price)

Ethanol Market Overview ......................... 1

Ethanol and Gasoline Component Spot Prices ....................... 1-3

Block Term Contract Prices in Key Markets........................................... 4

Bulk Truck Spot Prices in Key Markets........................................... 4

Renewable Fuels Averages ....................... 5

Biofuels Stock Performance ..................... 6

Inside Washington..................................... 7

In Key Commodity Markets ...................... 9

Key Supply and Demand Statistics ................................................... 8

Biodiesel/Ethanol Plant Profitability ........10

Renewable Fuel Feedstock/ Co-Product Price Index ...........................11

European, Brazilian and CBI Markets .............................................12

News of the Week ....................................15

continued on page 3

@OPISBiofuels | www.opisnet.com | 888.301.2645 2


Gulf CoastFri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.3900-1.4500 1.4150-1.4300 1.4250-1.4350 1.3850-1.4000 1.3800-1.4000 1.41100

B100 SME 3.1600-3.2600 3.1100-3.2100 3.1300-3.2300 3.0800-3.1800 3.1200-3.2200 3.17000

RBOB Unl 1.7016-1.7116 1.6522-1.6672 1.6734-1.7034 1.6109-1.6159 1.6450-1.6550 1.66362

RBOB Pre 1.7791-1.7891 1.7297-1.7447 1.7659-1.7959 1.7034-1.7084 1.7400-1.7500 1.75062

CBOB Unl 1.6941-1.6966 1.6422-1.6547 1.6634-1.6859 1.6059-1.6109 1.6350-1.6425 1.65312

Unleaded 1.7291-1.7331 1.6822-1.6922 1.7084-1.7159 1.6434-1.6459 1.6775-1.6800 1.69077

ULSD 1.8623-1.8638 1.8170-1.8265 1.8364-1.8389 1.7803-1.7903 1.8215-1.8220 1.82590

61ULSD 1.8623-1.8638 1.8170-1.8265 1.8364-1.8389 1.7803-1.7903 1.8215-1.8220 1.82590

New YorkFri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.4700-1.4800 1.4400-1.4600 1.4500-1.4650 1.4100-1.4150 1.3850-1.3900 1.43650

ITT ETH 1.4700-1.4800 1.4400-1.4600 1.4500-1.4650 1.4100-1.4150 1.3850-1.3900 1.43650

Ethanol Fwd 1.4700-1.4800 1.4250-1.4475 1.4250-1.4500 1.3975-1.4050 1.3850-1.4000 1.42850

B100 SME 3.1900-3.2900 3.1400-3.2400 3.1600-3.2600 3.1100-3.2100 3.1500-3.2500 3.20000

RBOB Unl 1.7366-1.7466 1.6847-1.6947 1.7124-1.7224 1.6539-1.6639 1.6930-1.7030 1.70112

RBOB Pre 1.8316-1.8416 1.7772-1.7872 1.8034-1.8134 1.7409-1.7509 1.7800-1.7900 1.79162

CBOB Unl 1.7391-1.7491 1.6872-1.6972 1.7134-1.7234 1.6559-1.6659 1.6950-1.7050 1.70312

CBOB Pre 1.8866-1.8966 1.8272-1.8372 1.8084-1.8184 1.7459-1.7559 1.7850-1.7950 1.81562

ULSD 1.9288-1.9388 1.8820-1.8920 1.9014-1.9114 1.8488-1.8588 1.8845-1.8945 1.89410

Los AngelesFri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.5200-1.5600 1.5300-1.5600 1.5300-1.5400 1.4800-1.5200 1.4900-1.5100 1.52400

CARBOB - R 1.6716-1.6816 1.6222-1.6322 1.6584-1.7284 1.5809-1.5909 1.6150-1.6200 1.64012

CARBOB - P 1.8416-1.8516 1.7922-1.8022 1.8984-1.9484 1.8109-1.8209 1.8400-1.8450 1.84512

ULSD 1.8613-1.8713 1.8145-1.8245 1.8464-1.8564 1.7938-1.8038 1.8320-1.8420 1.83460

Nebraska (fob Railcar)Fri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.2000-1.2300 1.2300-1.2400 1.2200-1.2400 1.1600-1.2100 1.1500-1.1900 1.20700

Tampa Fri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.5100-1.5600 1.5300-1.5600 1.5300-1.5600 1.4600-1.5100 1.4500-1.4900 1.51600

DallasFri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.3700-1.4200 1.3800-1.4100 1.3800-1.4100 1.3300-1.3800 1.3200-1.3600 1.37600

San FranciscoFri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.5200-1.5600 1.5300-1.5600 1.5300-1.5400 1.4800-1.5200 1.4900-1.5100 1.52400

WashingtonFri. 12/01 Mon. 12/04 Tues. 12/05 Wed. 12/06 Thurs. 12/07 Wkly. Avg.

Ethanol 1.4700-1.4900 1.4700-1.4900 1.4600-1.4800 1.4200-1.4600 1.3900-1.4000 1.45300

Ethanol & Gasoline Component Spot Market Prices (prices in U.S $/gal.) Methodology and Definitions:OPIS derives ethanol, gasoline and biodiesel prices

from many means, including surveying buyers and sellers via phone/e-mail, and receiving postings electronically from producers and purchasers. While OPIS makes best efforts to ensure the accuracy and timeliness of its prices, it in no way guarantees either the accuracy or timeliness of any of the data included herein. Definitions are as follows:

Ethanol Spot Price (Bulk Barge/Rail): These are large quantity pure ethanol deals transacted or being discussed in certain FOB markets.

Brazil Ethanol: Undenatured anhydrous ethanol cargoes, FOB Brazil terminals for export, typically 50,000 bbl or more available 5-30 days from the date of publication. The assessment generally reflects price at the Santos export terminal, though others may be used for assessment purposes.

Block Term Contract Values: These are the three-to-six month contract deals between large buyers and sellers of pure ethanol. Some are done as fixed, and those deals are reported in the “Fixed” column. Other deals are done based on a differential to certain gasoline benchmarks (usually conventional spot unleaded). Those formulae are tracked and reported by market each week in the “Formula”column and calculated (based on the closing Thursday price of the gasoline benchmark) to arrive at a “Formula Calculated” price. All deals (“Fixed” and “Formula”) are reported from a weighted average survey.

Bulk Truck Spot Prices (Rack): These are the prices for truck quantities of pure ethanol at storage points in the given market. These prices are not posted – they are offered to buyers given supply and demand dynamics at prices discovered and published by OPIS.

Splash Blend Rack Prices: These are the average of the Thursday closing price that producers and resellers are posting at various rack locations. Typically prices are for small quantities that marketers pull to blend into gasoline to create and deliver ethanol-blended gasoline to accounts.

Splash Blend Producer Prices: These are the average of the Thursday closing price that producers (not resellers) are posting at various rack locations. Typically prices are for small quantities that marketers pull to blend into gasoline to create and deliver ethanol-blended gasoline to accounts.

Low Carbon Fuel Standard Credits: Traded in U.S. dollars per metric ton of carbon dioxide (CO2), this represents the daily traded price range or range of bids and offers on carbon credits generated for compliance under California’s Low Carbon Fuel Standard program implemented by the California Air Resources Board. Trading is for credits transferable in the current calendar year, until the last month of the year when deals for the following year may also be considered.



as prompt values again came under particularly acute supply pressure.

Physical activity elsewhere remained very thin through most of last week, but New York Harbor ethanol barges values also backed off in the wake of heavy EIA figures. Midweek trading on December material at $1.4125/gal in the Harbor dropped as much as 5.25cts from values reported the previous day and as much as 6.25cts lower than barge values at the start of December. By Thursday, December barges continued to weaken, trading under $1.39/gal. Reports at the time indicated January barges priced about flat to half-a-cent over December values, erasing the earlier backwardation.

Some of the harshest discounts appeared to come to railcar values by the latter part of the week. The last word on railcars under Rule 11 terms had $1.28/gal as the “get-done” number. Late word on FOB Nebraska railcars moving ethanol on the Union Pacific rail line had trades at $1.18/gal – down a nickel or so from earlier last week. Further west, spot trades to Oregon at $1.40-$1.41/gal gave up as much as a dime since November.

“The reaction to the EIA numbers was definitely negative so [I’m] waiting for the dust to settle,” explained one Midwest trade source.

The big headline from EIA was the big jump in ethanol production – a surge of almost 4% as plants added a combined 42,000 b/d to output in the week ended Dec. 1. That output also obliterated the previous record-high U.S. plants hit just two weeks ago by 3.2% and at 1.108 million b/d had fuel ethanol production running more than 8% above the same week in 2016.

Equally troubling to some, however, were inventory levels that rose by another 500,000 bbl nationwide last week and the drop in blender net input of ethanol that amounted to just 885,000 b/d – down 37,000 b/d week-to-week. With ethanol stockpiles at 22.544 million bbl, EIA reported the highest ethanol supply level since May and almost 22% more on hand than at the same time last year.

The U.S. supply build last week came from large additions to East and West Coasts, with EIA showing a massive 359,000 bbl build in the West. That included the return of ethanol imports for the first time in a month, with all 36,000 b/d entering West Coast ports.Spencer Kelly, [email protected]

Renewable diesel imports swell as Argentine biodiesel tap turns off

The shutdown of biodiesel exports from Argentina as the U.S. started to put countervailing duties in place appears to have opened the door to more renewable diesel imports as more importers explored that option, based on a

review of the latest monthly data from Energy Information Administration.

Renewable diesel imports in September totaled 26.628 million gal, according to EIA’s latest assessment of company-specific import data and that indicated 70.9% more than the U.S. imported the month before – while at the same time biodiesel shipments from abroad plunged to just a fraction of their August level, down almost 85% at 8.61 million gal, including the absence of any Argentine material.

While Neste USA remained the major importer of renewable diesel and Singapore the key source of it, the EIA data for the first time showed oil major Shell’s Shell USA Trading arm shipping renewable diesel to the U.S. from Canada, importing 9.24 million gal over the month. The Shell shipments, one of 4.704 million gal and another of 4.536 million gal, both went into Portland, Ore. Neste renewable diesel imports totaled 17.388 million gal in September, 11.6% more than it imported in August, all from Singapore.

All of the Neste September shipments went to California, with an 8.904 million gal load landing in Richmond, a 4.704 million gal delivery to Long Beach, and a load each of 1.89 million gal to San Francisco and Selby.

With Argentina apparently out of the game, biodiesel importers relied heavily on Canadian material and that is where Archer Daniels Midland found the 3.99 million gal it imported over the month. ADM biodiesel deliveries included a 2.688 million gal load that went to San Francisco and an 882,000 gal shipment into Los Angeles. The agricultural processing giant also imported some smaller volumes, with

California Low Carbon Fuel StandardCarbon Credit: $/MT; Carbon Intensity Pts: $/CI; Carbon Credit per Gallon Diesel: $/gal; Carbon Credit per Gallon Gasoline: $/gal)


Carb Credit 109.000-110.000 107.000-109.000 105.000-107.000 107.000-109.000 107.000-109.000 107.9000

CI Pts BD 0.0138-0.0139 0.0135-0.0138 0.0132-0.0135 0.0135-0.0138 0.0135-0.0138 0.01361

CI Pts Eth 0.00888-0.00897 0.00872-0.00888 0.00856-0.00872 0.00872-0.00888 0.00872-0.00888 0.008793

CC Dsl 0.0523-0.0528 0.0514-0.0523 0.0504-0.0514 0.0514-0.0523 0.0514-0.0523 0.05180

CC Gas 0.0620-0.0626 0.0609-0.0620 0.0597-0.0609 0.0609-0.0620 0.0609-0.0620 0.06139

CC Dsl 95 0.0497-0.0502 0.0488-0.0497 0.0479-0.0488 0.0488-0.0497 0.0488-0.0497 0.04921

CC Gas 90 0.0558-0.0563 0.0548-0.0558 0.0538-0.0548 0.0548-0.0558 0.0548-0.0558 0.05525

Oregon Clean Fuels ProgramCarbon Credit: $/MT; Carbon Intensity Pts: $/CI; Carbon Credit per Gallon Diesel: $/gal; Carbon Credit per Gallon Gasoline: $/gal)


Carb Credit 50.000-55.000 50.000-55.000 50.000-55.000 50.000-55.000 50.000-55.000 52.5000

CI Pts BD 0.0060-0.0066 0.0060-0.0066 0.0060-0.0066 0.0060-0.0066 0.0060-0.0066 0.00628

CI Pts Eth 0.00408-0.00448 0.00408-0.00448 0.00408-0.00448 0.00408-0.00448 0.00408-0.00448 0.004280

CC Dsl 0.0163-0.0179 0.0163-0.0179 0.0163-0.0179 0.0163-0.0179 0.0163-0.0179 0.01710

CC Gas 0.0153-0.0169 0.0153-0.0169 0.0153-0.0169 0.0153-0.0169 0.0153-0.0169 0.01610

CC Dsl 95 0.0154-0.0170 0.0154-0.0170 0.0154-0.0170 0.0154-0.0170 0.0154-0.0170 0.01620

CC Gas 90 0.0138-0.0152 0.0138-0.0152 0.0138-0.0152 0.0138-0.0152 0.0138-0.0152 0.01450

Eth CI 69.89 1.4900-1.5100 1.4900-1.5100 1.4700-1.5000 1.4300-1.4700 1.4000-1.4100 1.46800



to San Francisco, in a load of 5.46 million gal and another load of 5.208 million gal, according to EIA. That is just a hair – some 0.78% – below the previous month when Shell sent one Brazilian delivery into California.

Ethanol-based ethyl tertiary butyl ether, or ETBE, continued to move from Brazil to Houston and Lyondell Chemical Worldwide upped those deliveries by 52.8% on the month, to total 8.148 million gal. ETBE imports in September arrived in shipment so 3.696 million gal, 2.604 million gal, and 1.848 million gal.

A couple importers also shipped in ETBE’s methanol-based cousin, methyl tertiary butyl ether, into Houston during September and the 4.788 million gal total was more than four times August imports. Lukoil Pan-Americas LLC made MTBE deliveries of 1.848 million gal from Brazil and 1.806 million gal from Argentina over the month, while Trafigura sent 1.134 million gal from Brazil to Houston.

Spencer Kelly, [email protected]

Vitol adds instant Midwest market presence via pending Noble deal

Vitol is a major player in the petroleum products markets on the East and Gulf coasts, but it soon will be a significant player in the Midwest after the closing of the deal to acquire Noble Group’s global oil liquids assets.

Vitol has apparently turned up its nose at the prospect of owning and operating Noble America’s big South Bend, Ind.,

378,000 gal into International Falls, Minn., and 42,000 gal to Eastport, Idaho.

Idemitsu Apollo Corp. turned to South Korea for the 2.268 million biodiesel gal it imported into Los Angeles in September in two deliveries, one of 1.218 million gal and a second at 1.05 million gal. The shipments represented the first time this year that Idemitsu Apollo showed up as a biodiesel importer in EIA’s monthly company-specific import data. Atlantic Biodiesel Trading USA imported 1.638 million gal of biodiesel from Canada to Buffalo-Niagara Falls, N.Y., in September, but that is 38% less than the company imported the previous month.

The balance of September biodiesel imports came in the form of small shipments from Canada. Targray Markets imported 294,000 gal over the month, with a 210,000 gal delivery into Detroit and 42,000 gal shipments into Blaine, Wash., and Buffalo-Niagara. BIOX USA, the U.S. arm of Canadian biodiesel producer marketer BIOX, imported 126,000 gal into Port Huron, Mich., and another 84,000 gal into Buffalo-Niagara, totaling 210,000 gal for the month.

Meantime, without the massive volumes available from Argentina, Shell Trading imported just 210,000 gal from Canada into Sweetgrass, Mont., in several shipments of 42,000 gal and a single 84,000 gal delivery.

The month before in August, Shell imported nearly 8.74 million gal of biodiesel with more than 8.6 million gal coming from Argentina.

Ethanol imports remained fairly steady month-to-month, with Noble Americas sending 10.668 million gal from Brazil

Ethanol Buying PricesEthanol Spot Price -------- Block Term Q2-Q3 Contract Values -------- Bulk Truck Splash Blend Splash Blend

City, State (Bulk Barge/Rail) Fixed Formula Formula (calculated) Spot Prices (rack) Rack Price Producer Prices

Albany, NY 134.00 147.50 138.50 N/A N/A

Houston, TX 139.00 160.50 NYMEX RBOB

Unl -7

163.00 143.00 N/A N/A

New Haven, CT 142.50 167.50 NYMEX RBOB

Unl -2.5

167.50 N/A N/A N/A

New York, NY 138.75 164.00 NYMEX RBOB

Unl -6

164.00 142.00 N/A N/A

Chicago, IL 131.23 155.00 NYMEX RBOB

Unl -14

156.00 133.50 135.00 135.00

Louisville, KY 132.50 N/A N/A N/A 135.50 N/A N/A

Minneapolis, MN 130.00 N/A N/A N/A 133.00 146.83 143.00

St. Louis, MO 133.00 156.50 NYMEX RBOB

Unl -13

157.00 136.00 185.06 N/A

Los Angeles, CA

(79.9)

150.00 166.00 NYMEX RBOB

Unl -2

168.00 158.00 N/A N/A

Phoenix, AZ 138.00 162.00 NYMEX RBOB

Unl -5

165.00 144.00 150.00 150.00

San Francisco, CA

(79.9)

150.00 166.00 NYMEX RBOB

Unl -2

168.00 158.00 N/A N/A

Washington 139.50 N/A N/A N/A N/A N/A N/A

Ethanol Truck & Spot PricesCity, State Spot Prices

(Rack)

Rack Price Producer

Prices

Cleveland, OH 135.50 158.80 N/A

Decatur, IL 128.00 N/A N/A

Des Moines, IA 126.00 138.68 138.13

Doniphan, NE 121.50 135.33 143.50

Fargo, ND 125.00 148.63 145.06

Indianapolis, IN 135.00 N/A N/A

Kansas City, KS 125.00 131.28 142.31

Madison, WI 134.00 150.09 N/A

Omaha, NE 125.50 131.08 138.69

Peoria/Pekin, IL 127.00 N/A N/A

Sioux City, IA 128.00 141.30 140.00

Sioux Falls, SD 136.50 140.39 139.00

Topeka, KS 127.00 147.27 144.69

Wichita, KS 129.00 150.45 147.13

Denver, CO 136.00 160.25 165

In Key Markets



ethanol plant – Noble last week nixed a deal with Zeeland Farm Services for the facility in favor of a $20 million offer from Mercuria Investments – but the global oil liquids assets acquisition will still offer Vitol significant ethanol marketing capacities, international supply contracts and possibly storage tanks.

Vitol will also take over Noble Petro, a wholesale supply and trading company focused on the east of Rockies markets. The concentration of Noble Petro’s rack business is in the Midwest, with some locations on the East Coast and Gulf Coast, based on Noble Petro’s website.

Ethanol Spot Ethanol Rack w/ RIN Ethanol Blended Rack Gasoline (10%) E-85 Racks E-85 Retail (w/ tax)

131.495 150.118 169.169 118.378 228.055

B100 w/ RIN B20 w/ ULSD B15 w/ ULSD B10 w/ ULSD B5 w/ ULSD B2 w/ ULSD

377.834 205.130 192.512 --.-- 196.058 193.144

National Renewable Fuels Averages

Key Renewable Fuels Regional Averages

NortheastEthanol Spot Ethanol Rack w/ RIN Ethanol Blended Rack Gasoline (10%) E-85 Racks E-85 Retail (w/ tax)

138.750 --.-- 167.594 145.943 268.508


363.500 201.609 201.500 --.-- 196.411 198.928

SoutheastEthanol Spot Ethanol Rack w/ RIN Ethanol Blended Rack Gasoline (10%) E-85 Racks E-85 Retail (w/ tax)

138.750 146.000 163.513 130.633 233.330


370.450 192.225 190.300 --.-- 190.176 189.317

Gulf CoastEthanol Spot Ethanol Rack w/ RIN Ethanol Blended Rack Gasoline (10%) E-85 Racks E-85 Retail (w/ tax)

139.000 158.000 166.994 124.872 212.238


401.600 195.601 183.701 --.-- 194.350 187.150

MidwestEthanol Spot Ethanol Rack w/ RIN Ethanol Blended Rack Gasoline (10%) E-85 Racks E-85 Retail (w/ tax)

124.115 145.161 170.509 108.003 185.017


356.903 201.553 194.910 --.-- 190.518 190.155

RockiesEthanol Spot Ethanol Rack w/ RIN Ethanol Blended Rack Gasoline (10%) E-85 Racks E-85 Retail (w/ tax)

139.000 155.938 172.073 122.750 246.508


--.-- 202.383 --.-- --.-- 203.112 203.950

West CoastEthanol Spot Ethanol Rack w/ RIN Ethanol Blended Rack Gasoline (10%) E-85 Racks E-85 Retail (w/ tax)

138.000 155.000 175.717 205.143 265.736


418.333 224.665 195.990 --.-- 214.065 --.--



Noble Petro has delivery capacity at 40 rack locations, and products lines include ethanol, biodiesel, petroleum diesel and gasoline. Noble Petro distributes products via trucks and it has access to Colonial Pipeline, Magellan Pipeline, Explorer Pipeline, Plantation Pipeline and NuStar Pipeline.

Currently, Vitol dabbles in the Midwest products market, and it does not have a significant market presence. Vitol also reduced its West Coast products trading activity earlier this year.

Noble Petro has a small products trading and wholesale marketing team in Houston, led by Robert Fuller.

Meanwhile, Vitol has recently hired Ryan Rocha, an East Coast products trader from Buckeye Energy Services, which is a wholesale fuel distributor at Buckeye terminals. Rocha has also traded Midwest products at BES.

Edgar Ang, [email protected]


2018 set to be another bullish year for RINs,ESAI predicts

Despite only a small change in renewable fuel volume requirements for 2018, Renewable Identification Numbers (RIN) prices will remain firm and even rise, according to the latest analysis form ESAI Energy.

The EPA set final 2018 RFS volume requirements slightly higher than the proposed targets released in July, but roughly on par with 2017 mandated volumes, ESAI said. The only marked change in final volume obligations was an increase in the cellulosic biofuel requirement. However, the lower cellulosic target reduced the amount by which the EPA could lower overall advanced and renewable fuel volume obligated volumes for 2018 under the cellulosic waiver, it said.

Preliminary analysis suggests RIN prices will remain high in 2018, ESAI said.

Even at the lower levels proposed in July, ESAI expected a bullish market for RIN prices in 2018. The factors next year include the absence so far of a biodiesel credit, tariffs on biodiesel imports from major suppliers and a growing deficit in conventional-ethanol-related D6 RIN credits, all of which will contribute to a high RIN price environment in 2018, the analysts explained.

Tariffs on biodiesel imports from Argentina and Indonesia will increase the marginal cost of biodiesel supply, ESAI said.

In 2016 and 2017, imported biodiesel accounted for a significant amount of RFS requirements for both biomass-based diesel and total advanced biofuels. To meet the slightly higher 2018 advanced biofuels mandate, biodiesel prices will have to rise enough to stimulate additional domestic production to replace lost imports, or they will have to rise to compensate importers for tariffs, the consulting firm said. Either way, biodiesel prices will increase, it said.

Meanwhile, the analysts believe it is less likely that the expired blender credit will be replaced with a production credit for biodiesel, ESAI added. This means D4 RIN prices will increase in 2018 as an incentive for enough higher priced biomass-based diesel to be blended into the diesel pool to satisfy the biomass-based diesel requirement and fill the shortfall in overall advanced biofuel volumes, it said.

D4 RIN credit prices typically need to be high enough to make biodiesel competitive with ULSD, ESAI said. D5 RIN prices will rise with them, due to the nesting structure of RFS, as D4 RINs will continue to be required to satisfy overall advanced RIN obligations, it added.

At the same time, ESAI said a continued shortfall in ethanol blending will support higher D6 RIN prices in 2018. ESAI estimates conventional ethanol blending would need to be 10.4% in 2018 to completely balance D6 RIN obligations. This would represent a substantial increase in higher ethanol blends.

Although an E15 waiver could contribute to additional ethanol blending next year, prospects for such a waiver remain uncertain, the consulting firm said. Without it obligated parties will most likely draw down D6 RIN stocks or turn to higher-priced advanced RINs to satisfy obligations, it said. Either outcome will support higher D6 RIN prices.

Weekly Biofuels Stock PerformanceCompany Symbol 12/7/17 11/30/17 change % change

Adecoagro SA AGRO ò 9.77 9.79 -$0.02 -0.20%

Aemetis AMTX ñ 0.70 0.67 $0.03 4.46%

Alliance BioEnergy + ALLM ò 0.05 0.08 -$0.02 -28.00%

Amyris AMRS ò 3.27 3.63 -$0.36 -9.92%

The Andersons, Inc. ANDE ó 32.30 32.30 $0.00 0.00%

Archer Daniels Midland ADM ñ 41.31 39.88 $1.43 3.59%

Bunge BG ñ 69.21 66.91 $2.30 3.44%

Cosan CZZ ò 9.24 9.26 -$0.02 -0.22%

Darling Ingredients DAR ó 17.95 17.95 $0.00 0.00%

FutureFuel Corp. FF ò 14.55 15.01 -$0.46 -3.06%

GEVO GEVO ò 0.61 0.61 -$0.00 -0.75%

Green Plains GPRE ò 16.60 16.85 -$0.25 -1.48%

Neste NESTE.

HE

ò 50.75 52.20 -€1.45 -2.78%

Novozymes NVZMY ò 53.56 54.10 -$0.54 -1.00%

Pacific Ethanol PEIX ò 4.35 4.50 -$0.15 -3.33%

Renewable Energy Group REGI ñ 11.50 11.35 $0.15 1.32%

REX American Resources REX ò 86.63 91.54 -$4.91 -5.36%

Valero Energy VLO ò 85.59 85.62 -$0.03 -0.04%

Velocys VLS.L ò 32.95 33.25 -£0.30 -0.90%

DJIA DJI ò 24,211.48 24,272.35 -$60.87 -0.25%



RIN credit prices, however, have been weaker so far this month. By Thursday, 2017 vintage D6 RINs traded down to 77cts/RIN, off as much as 16cts, or more than 17%, since November. The D4 credits gave up the dollar mark shortly after the start of December, with trades lately as low as 88cts/RIN, indicating a price drop of as much as 15% from November highs.

Some market sources are scratching their heads over the recent softness shown in the RINs trade, but others noted that improved prospects for federal tax reform lately may be one factor. “A few guys [are] pretty pumped that the tax bill got done,” observed one market watcher, adding that they believe “it boosted their chances of getting a [revived biodiesel tax] credit.”

There is nothing official, but there is talk that a retroactive $1/gal blender credit is a “done deal” and the tax reform legislation is the vehicle, another market source said, which put pressure on RIN values.

Of course, there is also the high level of ethanol production over the recent weeks with output breaking record after record lately. “More ethanol means more RINs,” said one RIN trader.

Still, ESAI foresees higher advanced and conventional RIN prices boosting renewable volume obligation (RVO) costs for obligated parties next year. The forecast from ESAI is that RVO costs will average 10cts of conventional fuel produced in 2018, up 17.7% from around 8.5cts for this year.



Stock Market Movers:

Noble Group picks Mercuria over Zeeland in sale of Indiana ethanol plant

Commodities trader Noble Group on Friday said it is scrapping the planned sale of its ethanol plant in South Bend, Ind., to Michigan-based Zeeland Farm Services and instead has reached a deal to sell the plant to Mercuria Investments US for roughly $20 million.

The company’s announcement comes roughly two week after it said it would sell the facility to Zeeland for about $17 million, a price that included $12.5 million for the plant, working capital of about $900,000 and an inventory valued at about $3.6 million.

The plant has a nameplate capacity of 100 million gal/year, but has believed to be operating at closer to an annual rate of 70 million gal/year.

The late-November agreement with Zeeland included a “go-shop” clause that permitted Noble to seek competing offers through Dec. 11. While Mercuria’s offer is higher than what Zeeland had offered, Noble said it will pay Zeeland a termination fee of $2 million.

Noble’s agreement with Mercuria does not include “go-shop” language, but does permit either party to terminate the deal if the sale is not closed by Dec. 13.

Mercuria a global energy and commodity group, has been trading biofuels since 2006 and owns a 250,000 metric ton/year biodiesel production plant in Hamburg, Germany.

Mercuria in September purchased Noble’s North American power and gas assets, but dropped out of the running for Noble’s global oil liquids assets after Vitol emerged as the leading suitor.

Noble, which has been selling assets to offset a decline in business, said it will use proceeds from the ethanol plant sale to reduce debt.

Noble put the book value of the South Bend plant at roughly $80.4 million as of Sept. 30. The facility, which is about five miles south of the Michigan border and about 93 miles east of Chicago, was built in 1984 and closed when the original owner, New Energy Corp., filed for bankruptcy in 2012.

Noble acquired the plant from liquidators and made significant investments to bring it back into operation. Upgrades includes conversion from coal to natural gas, installed a new regenerative thermal oxidizer, improving evaporation and upgrading the fermentation process. The plant has connections to Norfolk Southern rail lines.

Jeff Barber, [email protected]

Inside Washington:

Bio players unimpressed by Trump bid for dealto address RIN costs

The Trump administration has agreed to work with a group of U.S. senators from petroleum refining states to help set up a meeting with corn state senators aimed at a reaching an agreement that could lead to some sort of cap on the price of Renewable Identification Number (RIN) credits, according to a source familiar with the discussions said last week.

The White House commitment to help broker a deal came during a more-than-hour- long meeting Thursday at the White House that included President Donald Trump, EPA Administrator Scott Pruitt, Agriculture Secretary Sonny Perdue and Energy Secretary Rick Perry.

The meeting was requested by Texas Republican Sen. Ted Cruz and a group of other senators with refining interests in their states, including Republicans Pat Toomey of Pennsylvania, Mike Lee of Utah, John Cornyn of Texas, Jim Inhofe and James Lankford of Oklahoma and John Barrasso and Mike Enzi of Utah. Also attending the meeting were Louisiana Republican John Kennedy and Bill Cassidy.

Cruz has blocked the nomination of Iowa Agriculture Secretary Bill Northey to a senior position at USDA in a bid to get the White House to agree to a meeting to discuss the group’s concerns over the Renewable Fuel Standard (RFS).



The senators have argued that rising RIN costs are posing a threat to the operations of many merchant refiners across the country that are forced to buy the credits to comply with annual renewable fuel targets and putting thousands of refinery jobs at potential risk.

“The basic theme of the meeting was that the president recognized the need for short-term RINs relief and agreed to push for a meeting between the refinery state senators and the corn stake folks,” the source said.

Trump, the source added, “understands that there are a lot of blue-collar jobs at risk and wants both sides to come back and work with the White House on a solution.”

While no detailed proposals were discussed, the possibility of imposing some sort of cap on RINs prices is a possibility, he said, adding, however, that the White House stressed that any solution would have to be a “win” for both sides.

Iowa Republican Sen. Charles Grassley, the leading advocate in Congress for the RFS, has to date expressed little interest in such a meeting and his office had no immediate comment. Neither did any key ethanol industry players appear ready to bite on a deal.

Renewable Fuels Association President and CEO Bob Dinneen said “numerous analyses, including those recently conducted by Wells Fargo, Harvard University, the University of Michigan, Iowa State University and other institutions show that merchant refiners recoup their RIN costs through higher refining margins, while retail gasoline prices are unaffected by RINs.

In addition, Dinneen noted in releasing its final 2018 renewable fuel targets last week, EPA itself said it had

“concluded that refiners are generally able to recover the cost of RINs in the prices they receive for their refined products, and therefore high RIN prices do not cause significant harm to refiners.”

Jeff Barber, [email protected]

U.S. government shutdown won’t haltweekly EIA data in short term

Congress on Thursday passed a two-week funding bill that will keep the government operating until Dec. 22, meaning a government shutdown for the Christmas weekend can’t be ruled if lawmakers can’t agree on a long-term funding bill.

The potential for a shutdown has left some in the energy industry wondering whether it could affect weekly reports issued by Energy Information Administration (EIA). But sources last week said the agency is likely to continue operating for at least few more weeks even if the government closes shop.

That means EIA is expected to publish its weekly ethanol and other energy data reports due each Wednesday, even in the event of a government shutdown over current budget squabbles.

An EIA spokesman was not immediately available for comment, but the agency has been able to keep its lights on during similar impasses that closed non-essential government operations in the past.

The last time EIA had to shut as a result of the lapse in appropriations was in October 2013. That work stoppage lasted only three days, but EIA skipped its energy data report for one week. That was the only time in recent memory that

Key Supply and Demand Statistics (thousand barrels)

Ethanol SupplyEthanol Current Last Week 3-Yr Avg

PADD 1 Inventories 7,185 6,952 6,603



PADD 4 Inventories 362 329 360


Total Inventories 22,544 22,044 20,163

Gasoline Production Gasoline Current Last Week 3-Yr Avg

PADD 1 3,058 3,200 3,053

PADD 2 2,492 2,628 2,523

PADD 3 2,579 2,725 2,360

PADD 4 291 283 319

PADD 5 1,475 1,566 1,516

Total Production 9,895 10,402 9,771

Ethanol Production Ethanol Current Prev Mo 3-Yr Avg

PADD 1 749 795 740

PADD 2 27,930 29,830 26,189

PADD 3 876 801 754

PADD 4 409 412 402

PADD 5 617 609 581

Total Production 30,581 32,447 28,665

Gasoline Supply Gasoline Current Last Week 3-Yr Avg






Total Inventories 220,800 214,200 217,133



EIA missed a weekly report and traders told OPIS that many players felt as though they were “flying blind” for that week when the agency’s data was unavailable.

Sources last week said EIA has enough funds to pay its employees for a several weeks after a shutdown, allowing workers to put out the weekly and monthly reports. This is possible because EIA had front-loaded some expenses earlier this year as it had done in the past in anticipation of a budget issue. Also, EIA has reduced staff count through retirements.

But if a government shutdown extends beyond several weeks, EIA would likely have to stop issuing the reports.

Ethanol markets have become very attentive to EIA’s weekly data reports on ethanol supply and inventory. So, too, have oil and gasoline markets come to rely on EIA’s weekly and monthly data reports for information on U.S. demand, supply, export, import and production of crude, natural gas products and refined products.



In Key Commodity Markets:

In finished markets...Before gasoline futures mounted a comeback late last

week, nearly every factor that can depress gasoline prices appeared to be at work in the market.

The costs of making gasoline dropped several dollars as crude prices struggled through the week that followed the OPEC meeting. Gasoline demand measured less than 9 million b/d for a second straight week. U.S. refinery production is some 750,000 b/d above last year. And some ethanol prices hit their lowest levels since January of 2016, and the price of the D6 RIN credits that come with that ethanol retreated below 78cts/RIN – off more than a dime so far in December and giving U.S. refiners more incentive

to move product stateside, rather than offshore, where RIN obligations don’t come into play.

On the NYMEX, RBOB futures for front-month that bounced back by 3.91cts Thursday to $1.70/gal still eased by 3cts since the end of November. February RBOB settling at $1.7148/gal regained 3.49cts for the day but gave up 2.64cts over the week. The Merc’s WTI crude also bounced back Thursday, but remained south of where the Nov. 30 OPEC meeting left it, with a 73cts gain on the day at $56.69/bbl, off 71cts week-to-week.

Notably, all the action through the last week took place amid a good deal of speculative length for RBOB futures. Many contemporary traders probably don’t recognize that the dead of winter brings a slump for gasoline demand, irrespective of the economy or the perceived wealth attached to record U.S. equity prices.

In fact, December and January are traditionally very painful months for gasoline crack spreads.

Physical trading had spot gasoline prices also rebounding on Thursday. Cash markets got a lift from the Merc rally, but in some cases valuation shifts in various bulk markets put a damper on cash gasoline moves.

In the Gulf Coast, basis differential softened for CBOB prompts and countered the Merc’s impact. CBOB prompt deals last running a 6.25ct-to-Merc discount widened that by 75-points on the day and the outright $1.6375/gal spot price was up 3.16cts day-to-day, though down a nickel in the week-to-week comparison.

The price bounce brought Gulf Coast gasoline spot values back from some of the lowest traded levels since early November.

Sources in the Gulf also reported at midweek that though waterborne freight rates continued to fall, it was still a better bet for many U.S. Gulf Coast refiners to send gasoline offshore, rather than to points in Florida and Georgia.

Note: OPIS Refined Spots and Ethanol averages are based on full-day prompt assessments for each market.

New York Chicago Los Angeles

Ethanol vs. Spot Unleaded and “BOBs” in Key Markets



In contrast to the Gulf, Chicago CBOB trading on Thursday cut its discount to the Merc, nearing parity before trading a penny under the benchmark. An outright CBOB price of $1.69/gal Thursday jumped 6.41cts on the day and rang up a nickel gain since November.

Some areas of the Midwest started to report tighter gasoline supply availability at midweek, but gasoline inventories counted by EIA for the week ending Dec. 1 had regional inventory up 1.7 million bbl, to 47.2 million bbl.

Meantime, the broader gasoline data from EIA had nationwide stocks building by 6.8 million bbl over the last week, with gasoline stores at nearly 220.9 million bbl, still holding almost 8.7 million bbl where they were a year ago. Gasoline production at 9.895 million b/d dropped from the huge 10.4 million b/d reported week ago, but remain ahead of the same time last year, while imports of gasoline are still very low at 488,000 b/d.

Gasoline exports remained sturdy at 894,000, b/d, but that is not enough to keep domestic supplies balanced. The thinking is may take exports of more than 1 million b/d to prevent hefty wintertime stock builds.

The EIA bolstered its calculation for implied gasoline demand a bit, but the 171,000 b/d it added on the week was just a nominal 2% rebound given the very large decline it reported a week ago. The EIA’s gasoline offtake estimate remained under 9-million-b/d, at 8.895 million b/d, which was nevertheless 1.6% more demand than the same time last year.

Many expect the coming weeks to deliver more bearish data sets from EIA. Inclement weather may bring some measurements of gasoline demand at 8.5 million b/d

or less, or about 1.2 million b/d beneath driving season highs. Gasoline inventories should increase, and refinery turnarounds don’t begin until January, when refiners generally need to run at high rates for heating oil and diesel.

EIA doesn’t provide statistics on regional gasoline demand, but Northeast marketers say sales are trailing early December last year, even with little inclement weather.

The average retail price of U.S. regular gasoline at last look ran $2.474/gal, continuing a downward through the week, according to OPIS and AAA. The price average is 1.6cts lower week-to-week and off 7.4cts over the last month. Still, pump prices averaged 27.6cts higher than a year ago.

In natural gas...A tough weather-driven market for natural gas got even

more difficult Thursday as paper and physical values made a harsh retreat following a government inventory report that added to supply in the traditional withdrawal season.

In cash trading, Henry Hub next-day spot values shed 11cts Thursday and at $2.81/mmbtu turned 13cts lower in the week-to-week comparison. Chicago Citygate gas fell 21cts on the day, taking spots down 8cts over the last week to $2.70/mmbtu. Chilly weather helped support gas values in areas of the mid and upper East Coast, but prices slumped nearly everywhere else where the weather was not enough to indicate demand that would counter the surprising build in stocks reported by EIA.

That build also helped to prompt a steep retreat in NYMEX gas futures. Front-month January gas dropped 15.9cts on Thursday, settling at $2.763/mmbtu, off 26.2cts from where

Biodiesel Gross Margins for Midwestern Plants ($/gal) Ethanol Gross Margins for Midwestern Plants ($/gal)

*Biodiesel production margin calculated from cash feedstock costs and sales values for soy methyl ester biodiesel plants and are estimates of industry trends under current market

conditions. Profits for any given biodiesel plant could be higher or lower.

*Dry Milling margin calculated from cash feedstock and product sales values for wet and dry-mill plants and are an estimate of the industry trend under current market conditions.

Profits for any given ethanol plant could be higher or lower.

Plant Profitability



National Renewable Fuel Feedstock/Co-Product Price Index

*refined, bleached, deodorized **free fatty acids ***high protein Data provided, in part, by World Energy, www.worldenergy.net

it settled a week ago. February gas at $2.782/mmbtu lost 14.2cts in Thursday trading.

Sources said the market continued to focus on shifting weather forecasts as a proxy for monitoring demand for natural gas.

The EIA-reported gas storage totals for the week came in a net 2 bcf higher than the week before, not a complete surprise, though expectations were in the neighborhood of a 7 bcf draw and it is the first December- build since 2012. “[N]et injections in the South Central region more than offset

net withdrawals in the East and Midwest regions,” explained the agency. “Relatively mild temperatures resulted in smaller-than-average net withdrawals and decreased natural gas consumption, primarily in the residential/commercial sector.”

U.S. natural gas supply now stands 6.7% below the same time last year and 1% lower than the five-year average for the week.

For the last week, EIA had average total natural gas supply running flat week-to-week, but production dropped 1% at the same time.

Feedstock/Co-product Location/Source Spot Price Previous 4-Wk. Avg.

Palm Olein US/Gulf Coast $0.345/lb $0.3515 $0.3544

Soybean Oil - Crude Degummed Central Illinois $0.3217/lb $0.3295 $0.3301

Soybean Oil - Crude Degummed Central Illinois - USDA $0.3233/lb $0.3275 $0.3296

Soybean Oil - RBD* Central Illinois - USDA $0.3467/lb $0.3545 $0.3574

Canola Oil West Coast $0.4217/lb $0.4295 $0.4301

Canola Oil Midwest $0.3942/lb $0.4020 $0.4026

Corn Oil - Crude Midwest $0.3475/lb $0.3375 $0.3455

Corn Oil - Refined Midwest $0.4475/lb $0.4375 $0.4455

Corn Oil - Distillers Midwest $0.2400/lb $0.2556 $0.2543

Beef tallow Chicago $0.2600/lb $0.2600 $0.2600

Choice White Grease Chicago $0.2300/lb $0.2400 $0.2375

Poultry Fat (Low FFA)** Southeastern US $0.3100/lb $0.3100 $0.3100

Yellow Grease Illinois $0.2250/lb $0.2350 $0.2325

Methanol US Gulf Coast $1.1050/gal $1.0675 $1.0369

Soy Meal (Hi-Pro)*** Illinois Truck $332.00/ton $317.00 $315.50

Corn Central Illinois $3.4800/bu $3.4400 $3.4250

Soybeans Central Illinois $9.8800/bu $9.7500 $9.7725

Crude Glycerin (80%) FOB Midwest $0.0900/lb $0.0850 $0.0863

DDG-S (Distillers Dried Grains w/ Solubles) Eastern Cornbelt - USDA $127.2500/ton $123.2500 $123.9375

Corn Kansas City - USDA $3.2900/bu $3.2975 $3.2538

ULSD OPIS National Average $1.8640/gal $1.8754 $1.8880

RBOB OPIS National Average $1.6847/gal $1.7134 $1.7205

Ethanol OPIS National Average $1.3149/gal $1.3619 $1.3640

Unleaded RFG OPIS National Average $1.6455/gal $1.6954 $1.6791

Natural Gasoline Mt. Belvieu Non-TET $1.3237/gal $1.3319 $1.3402

Natural Gasoline Conway In-well $1.2600/gal $1.2850 $1.2841

Ethanol RINs (Current Year) OPIS National Average $0.7875/RIN $0.9000 $0.8631

Ethanol RINs (Previous Year) OPIS National Average $0.7825/RIN $0.8950 $0.8550

Cellulosic RINs (Current Year) OPIS National Average $2.9300/RIN $2.9500 $2.9575

Cellulosic RINs (Previous Year) OPIS National Average $2.8200/RIN $2.8100 $2.8250

Biodiesel RINs (Current Year) OPIS National Average $0.9000/RIN $1.0313 $0.9853

Biodiesel RINs (Previous Year) OPIS National Average $0.8600/RIN $0.9813 $0.9403

Advanced Biofuel RINs (Current Year) OPIS National Average $0.8900/RIN $1.0200 $0.9750

Advanced Biofuel RINs (Previous Year) OPIS National Average $0.8500/RIN $0.9700 $0.9300

CA LCFS Carbon Credit California $80.2500/mt $81.0000 $79.2813

CA LCFS Carbon Intensity California $0.0065/CI $0.0066 $0.0065



The six-month NYMEX futures strip settled Thursday at nearly $2.7458/mmbtu, down more than 20cts week to week and nearly 6.42cts under the Henry Hub next-day spot price.

In corn markets...So far in December, corn markets continued to appear

slack as the harvest season came to a close. The most active CBOT corn futures contract, now March, settled Thursday down 1.25cts, to $3.515/bu, and that is off 4.25cts since November.

The front-month December contract is winding down fast, but it settled off half-a-cent in limited trading Thursday, and at $3.3875/bu the contract fell 3cts in first week of the month.

Trade sources noted some halting attempts at a rally in corn markets over the last week, but nothing that could “rev things up” as one market source put it. He noted that some strength that showed up in overnight trading usually fizzled when markets moved into the next day – largely because most upticks over the week came from short-covering and lacked any fundamental support.

But record-high ethanol production EIA reported for the week ending Dec. 1 indicated that producers used more than 110 million bu of corn, almost 4.7% more than they chewed up over the same week last year.

The robust domestic demand for corn from U.S. ethanol producers, however, was more than offset by the ongoing difficulty in export markets. USDA reported corn sales within expectations for the week, but put export shipments at just over 592 metric tons, 9% lower than it reported a week ago and down nearly 27% from year-ago numbers. Softer Brazilian currency at midweek made Brazilian corn cheaper than U.S. product.

Traders also kept an eye on dry weather forecasts out of Argentina and Brazil. A La Nina pattern might be in the cards, and that could send dry weather to the region and impact production there.

Spot corn talks for the week remained mixed again with cash buyers looking to get a better fix on values. Kansas City

No. 2 Yellow corn ran $3.265-$3.315/bu and that oscillated between up 3.25cts to down 1.75cts from the previous week. Chicago No. 2 yellow corn traded $3.155-$3.365/bu, up from 8.75-16.75cts in the week-to-week comparison.

In biodiesel...The pullback in petroleum prices over the first week

of December and the falling price for the Renewable Identification Number credits took a lot of steam out of any incentive to blend biodiesel.

At the nation’s wholesale racks, biodiesel prices eased by 3.6cts on average so far this month, to $3.778/gal by Thursday. But most petroleum diesel values fell more, dropping 4.87cts on average since November to $1.941/gal.

An even bigger factor for B100 blenders last week was the December erosion in RIN credit prices. The D4 credits attached to biodiesel, on average, slid more than 13cts week-to-week, and 2017 vintage deals down to 88cts/RIN cut the per-gallon credit value for a biodiesel gallon to $1.32. A week ago, B100 might bring as much as $1.56 in credit value with each gallon.

The calculated premium for B100 over on-road petroleum diesel at U.S. racks jumped to 51.7cts/gal by Thursday – up 86% on the week.

Sources in the market say RINs are under pressure due to optimism over the improving chances for a federal tax reform bill that will include a tax credit for biodiesel blending. “The market seems to be reacting as if the biodiesel tax credit is a done deal,” explained a biodiesel marketer. “RINs are dying off as a result.”

In DDGs...Some factors converged to help firm prospects for dried

distillers grain last week. Colder weather is helping to support domestic demand, along with stronger soybean meal values and stronger foreign interest.

In Iowa, FOB plant prices for DDGs ranged $118-$130/ton, and that is $3-$5 higher than quoted in the market a week

European Biodiesel Spot Markets

Rotterdam FAME ($/gal) Rotterdam RME/Gasoil ($/gal)



ago. Minnesota DDGs remained flat over the week, at $120-$130. But Eastern Corn Belt prices turned up by $7-$8 week-to-week, ranging from $118-$151.

In the western reaches of the Corn Belt, Nebraska DDGs running from $130-$158 continued to gain on the high end, up $4 on the week. Kansas DDGs at $145-$160 held steady week-to-week.

Delivered West Coast DDG prices also mostly moved up for the week. DDGs to the Pacific Northwest gained $2, at $192-$201, while California deliveries running $190-$208 held flat to $4 higher over the week.

The recently colder weather has helped support demand for DDGs, said sources, but they also note that it remains cost-effective versus firmer prices for alternative-feed soybean meal in recent weeks.

In natural gasoline...Mont Belvieu non-TET natural gasoline prices remained

mired in their recent range of trading last week – a span of daily OPIS averages that has lingered exclusively in the $1.30s/gal since Oct. 27.

These values are, to be sure, still comparatively firm in the grand scheme of things, “but the market doesn’t appear to be a runaway bull by any means,” one source said.

Strength in octane blendstocks has dominated the gasoline markets of late as few offers have been floated for alkylate and reformate.

Light naphtha, as well, has seen increasing interest as global arbitrage for waterborne cargoes wavered in and out of financially attractive territory this week. “However, ‘interest’ is the only way I would classify it,” the source said. However, “there seems to be two bids for every offer,” thus still providing some underlying export support for light naphtha.

Mont Belvieu non-TET natural gasoline traded around $1.32/gal near the end of last week, compared with $1.35/gal

values the previous week. In 2016, natural gasoline hovered around $1.10/gal. Conway values were running in the mid-$1.20s/gal later last week, versus almost $1.30/gal the week prior and $1.16/gal in the same period of 2016.

In ultra-low-sulfur diesel...In a week in which the government reported a number of

record-highs from energy producers, it also had distillate output touching a new peak in weekly reports.

Total distillate production jumped 442,000 b/d over the previous week – an increase of 8.9% in just the last week – according to EIA data for the week ending Dec. 1, and that put output at the highest rate on record with the agency – 5.402 million b/d. The output level for the week also represented almost 9% more than plants made a year ago – adding some 444,000 b/d to distillate output versus the same week in 2016.

Luckily for refiners, this is traditionally a hectic time for distillate exports and the 1.572 million b/d that EIA counted moving offshore in the last week marked the fourth largest outflow on record.

Not unlike the supply situation for gasoline, the ultra-low-sulfur diesel segment of distillate supply made a sturdy build last week but remained well behind year-ago inventory. At more than 113 million bbl on hand, nationwide ULSD stockpiles climbed more than 2.53 million bbl week-to-week, but remained at a 15.1% year-to-year deficit.

Gulf Coast ULSD stocks sank by 1.355 million bbl – the only region to show a draw last week – and the 32.287 million bbl on hand there is 7.2% lower than a year ago.

Gulf Coast spot ULSD prices did pop higher Thursday after a slightly soft week, adding 3.62cts on the day and at $1.8215/gal prompt values tipped 49 points higher since the end of November.

Brazil and CBI Ethanol Spot

Anhydrous Ethanol FOB Santos vs. NYH, Tampa Spot ($/gal) Anhydrous vs. Hydrous FOB Santos ($/gal)

Brazil ethanol is anhydrous FOB Santos and includes a transportation fee and tax.



European, Brazilian and CBI Markets:

RME FAME Ethanol T2

Rotterdam $3.25 $2.75 $2.10/€1.78

Prices in U.S. $/gal., 12/7/17. Data provided in part by Starsupply Renewables,

www.starsupply.ch, and SCB & Associates, www.starcb.com

European MarketsA group of Dutch scientists has penned a letter to the new

Cabinet expressing “sincere worries about the European biofuel policy.”

The 177 scientists ask the Cabinet “to acknowledge that admixture of food crops into fuel causes severe damage to climate, nature and communities.”

“The European admixture policy is a false solution to climate problems,” they said, adding that “biofuels from food crops have no place in the European 2030 Agenda on Sustainable Development.”

Such admixture of fuel crop oil “relies on the unfounded assumption that this leads to more-sustainable fuel use, but in reality causes ecological and social degradation,” the letter said. “The policy serves as a veil that obscures the risks involved in fossil fuels while offering no more than a false solution for our energy requirements.”

The admixture policy therefore does not meet the sustainability requirements that the EU poses for itself, according to the group.

“Recent research – carried out under assignment of the European Commission – points out that admixture leads to increased greenhouse gas emissions,” it said. “Biodiesel from food crops on average emits 1.8 times as much CO2 as fossil fuels and this number increases to three times more in case of biodiesel from palm oil.”

In addition, the scientists wrote, the European admixture policy leads to an increased demand for vegetable oils from food crops, adding that increasing demand for biofuel crops leads to increased food prices.

***

A California transit authority has switched its entire fleet of buses from operating on petroleum diesel to using only Neste MY Renewable Diesel, the Finnish company said this week.

The move was made by Tri Delta Transit, which provides more than 3 million trips each year in eastern Contra Costa County, according to Neste. Tri Delta Transit decided to switch to the renewable fuel to “further our commitment to operating our service as environmentally responsible as possible,” CEO Jeanne Krieg said.

With the switch, “we will reduce our output of greenhouse gases by up to 80%,” Krieg said. Tri Delta Transit will use about 55,000 gal annually. The renewable diesel currently

costs 2cts less per gallon than regular, petroleum-based USLD, Krieg added.

“Since changing fuels, we have received zero complaints from drivers regarding vehicle power and reliability, and there has been no change to routine maintenance,” said Kevin Moody, the company’s maintenance director.

He added that none of the drivers were told of the switch to renewable diesel and that none noticed any difference.

Neste says that the fuel is produced from 100% renewable and sustainable raw materials.

Market updateBiodiesel prices were significantly lower this week.

RME FOB ARA had a bid-ask range at some $954-$974/mt at the Dec. 7 close, down about $43 from the previous week. SME FOB ARA had a bid-ask range of some $824-$844/mt, down about $31 from last week, while PME’s range was at some $772-$792/mt, down about $30 from the previous week. FAME 0 FOB ARA had a range of $807-$827/mt, also about $30 lower than last week’s.

The movement occurred as Rotterdam gasoil was about $8 lower at some $549/mt on the week ended Dec. 7.

Prices are supplied by SCB Renewables.Michael Schneider, [email protected]

Brazil and CBI MarketsAnhydrous Ethanol $1.74129-$2.34696 Hydrous Ethanol $1.70344-$2.15769 (FOB Santos, 12/7/17, prices in U.S. $/gal.)

Hydrous ethanol sales by Brazilian distributors hit a 2017 high in October, but sales of the biofuel remain down year on year, figures from Brazil’s National Oil, Gas and Biofuels Agency (ANP) show.

In Brazil, hydrous ethanol competes with gasoline at the pump, and anhydrous ethanol is blended into gasoline at a blend rate of 27%. Hydrous ethanol this year has struggled to be price competitive with gasoline in most Brazilian consumer markets.

The ANP figures show that distributors sold 1.38 billion liters of hydrous ethanol in October. That was up from 1.31 billion liters in September and also up from 1.20 billion liters in October 2016. It also represented the highest monthly sales of hydrous ethanol since December 2015 (1.55 billion liters).

Over the first 10 months of 2017, distributor sales of hydrous ethanol averaged 1.08 billion liters a month, down 13.1% versus the same period in 2016 (1.24 billion liters a month).

Because of its lower fuel efficiency, hydrous ethanol loses competitiveness when its price surpasses 70% of the price of gasoline. Hydrous ethanol sales were up in October versus September despite hydrous ethanol becoming less competitive with gasoline.



Brazil-wide, the ratio in October stood at 68.50%, up from 67.84% in September, according to ANP. The Brazil-wide ratio in November climbed higher, to 69.68%.

However, the competitiveness of hydrous ethanol in Brazil varies considerably by market. The Brazilian Sugarcane Industry Association (UNICA) noted in late November that hydrous ethanol remains competitive with gasoline in the states of São Paulo, Minas Gerais and Mato Grosso, which account for nearly half of Brazil’s fleet of light-duty vehicles and motorcycles.

The bright side for Brazil’s ethanol producers is that gasoline sales in 2017 are up year on year, and that translates to higher sales of anhydrous ethanol. However, whereas October saw a 2017 high for sales of hydrous ethanol, October gasoline sales saw just a small upward bounce from the 2017 monthly low recorded in September.

Distributor sales of “gasoline C” (gasoline blended with ethanol) totaled 3.54 billion liters in October, up slightly from 3.50 billion liters in September but down from 3.62 billion liters in October 2016.

Over the first 10 months of 2017, distributor sales of gasoline C averaged 3.69 billion liters a month, representing a 5.0% increase over the same period in 2016 (3.51 billion liters a month).

The gasoline sales through October of this year imply demand for anhydrous ethanol of 995.2 million liters a month (on average). Through September, implied demand for anhydrous ethanol had averaged 999.5 million liters a month (and through August, 1.01 billion liters a month).

A good chunk of that demand has been met by imports of U.S. ethanol. Figures from the U.S. Department of Commerce (DOC) show that, over the first 10 months of 2017, the U.S. exported 1.38 billion liters (364.1 million gal) of undenatured fuel ethanol and 18.0 million liters (4.8 million gal) of denatured fuel ethanol to Brazil. Those two grades combined translate to the U.S. exporting an average of 139.6 million liters (36.9 million gal) a month of fuel ethanol to Brazil.

Market updateEx-mill anhydrous ethanol prices in São Paulo state remain

slightly lower than a year ago. However, much of the gap was closed over the course of November, which witnessed consistently rising prices versus an unmistakable downtrend during the same month last year.

At the end of October (the week ending Oct. 27), ex-mill anhydrous ethanol prices were down by 23.1% year on year, according to the weekly assessments of the University of São Paulo’s CEPEA/ESALQ (Cepea) economic research center.

By the week ending Dec. 1, ex-mill anhydrous ethanol prices were down by just 2.1% year on year, with the Cepea assessment at US$0.5782/liter ($2.1887/gal) versus $0.5909/liter ($2.2368/gal) a year earlier.

On a dollar-denominated basis, the last time that ex-mill anhydrous ethanol prices were on par with corresponding 2016 prices was in early June.

Brad Addington, [email protected]

News of the Week:

Newly opened Beaumont terminal loads first ethanol shipment: Green Plains

The Jefferson Energy Terminal in Beaumont, Texas, has loaded its first vessel with nearly 3 million gal of ethanol destined for Brazil, Green Plains and Jefferson Energy said recently.

A second shipment of 10 million gal was recently loaded on a vessel bound for India, the companies announced through their joint venture, JGP Energy Partners.

“This state-of-the-art terminal aligns with our strategy to grow our downstream distribution capabilities and optimize our logistics platform,” Green Plains President and CEO Todd Becker said in a statement.

Texas governor asks EPA to reduce state’s RFS volume obligation

Texas Gov. Greg Abbott (R) has asked EPA to reduce the Renewable Fuel Standard (RFS) volume mandates for state refiners, saying “escalating and unjustified” prices for Renewable Identification Number (RIN) credits are causing significant harm to key parts of the state’s economy.

“Current implementation of this dated federal mandate severely impacts Texas’ otherwise strong economy and jeopardizes the employment of hundreds of thousands of Texans,” the governor said in a Friday letter to EPA Administrator Scott Pruitt.

China Airlines joins Airbus program for sustainable jet fuel blends

Taiwan’s China Airlines has joined a program to use a blend of traditional and sustainable biofuels for Airbus delivery flights, Airbus last Friday.

The aircraft involved is the 10th A350-900 for China Airlines, which last week flew from the manufacturer’s delivery center in Toulouse, France, to Taipei with a 10% blend of sustainable jet fuel in its tanks.

The fuel option at a station adjacent to the Airbus delivery center in Toulouse was developed by Airbus and Air Total. Twenty-one aircraft have been delivered by Airbus since the facility was inaugurated in May 2016, Airbus said.



Pearson becomes exclusive West Coast marketer for EKAE renewable diesel

San Diego-based Pearson Fuels has signed a deal to be the exclusive West Coast marketer for renewable diesel (RD) produced by East Kansas Agri-Energy (EKAE), the companies said recently.

EKAE produces renewable diesel at its Garnett, Kan., facility using corn distillers oil, a byproduct of ethanol production. EKAE operates ethanol plant with a nameplate capacity of 35 million gal/year.

In addition to qualifying for Renewable Identification Number credits under the Renewable Fuel Standard, EKAE’s RD is eligible to earn credits under the California Low Carbon Fuel Standard and the Oregon Clean Fuels Program.

ITC finds that biodiesel imports from Argentina, Indonesia harm U.S. producers

The U.S. International Trade Commission today made a final finding that biodiesel imports from Argentina and Indonesia harm U.S. producers, the organization said Tuesday.

ITC “has made affirmative determinations in its final phase antidumping and countervailing duty investigations concerning biodiesel from Argentina and Indonesia,” it said.

The Department of Commerce last month finalized a preliminary finding that biomass-based diesel (BBD) exports to the United States from both countries receive subsidies that violate international trade rules and agreed to impose countervailing duties on BBD from both countries. The agency’s finding cleared the way for ITC to make a final determination on whether the domestic industry has been harmed by the imports.

EPA approves cellulosic ethanol productionat Nebraska plant

EPA has approved Mid America Agri Products-Wheatland’s registration to produce cellulosic ethanol at its Madrid, Neb., plant using Edeniq’s Pathway technology, the California-based biotechnology company said Tuesday.

Mid-America’s 48-million-gallon-per-year ethanol facility began using Edeniq’s Pathway technology this month, Edeniq said in a statement.

“We are thrilled that Mid America Agri Products has joined the growing list of ethanol plants that have received EPA approval to use our company’s technology to produce cellulosic ethanol,” Edeniq President and CEO Brian Thome said.

LCFS weekly transfer activity soarsto all-time high: CARB

Low Carbon Fuel Standard credit transfer activity and trade volumes in the week ended Dec. 3 hit an all-time high as credit holders sought to take advantage of higher prices, according to data released Wednesday by the California Air Resources Board (CARB).

CARB said 552,477 credits were transferred in the most recent reporting week, up from 322,810 in the previous week. The total volume broke the previous weekly record of 446,678 in the week ended Dec. 4, 2016. The 48 reported transfers in the week were up from the 23 reported in the previous week and also topped the previous record high of 42 transfers in the week ended Dec. 25, 2016.

Less than 1% of U.S. retail fuel pumps offer E15; major players taking lead

Less than 1% of total retail fuel stations in the U.S. are offering E15 or gasoline with a 15% ethanol blend as of November, with major players taking the lead on the slow expansion of retail fuel product offering, according to Fuels Institute.

Most retail fuel stations in the U.S. are offering the mandated E10 gasoline or gasoline with a 10% ethanol blend.

Today, there are 1,147 retail locations in 29 states selling E15 usually between 3-10 cents below regular gasoline, Fuels Institute said. There are an estimated 123,289 convenience stores selling fuel in the U.S.

California will continue to ‘serve as a model’ for climate programs: CARB

SAN FRANCISCO – California is becoming an increasingly influential catalyst on climate policy and that trend will only accelerate in the next decade, California Air Resources Board (CARB) Executive Officer Richard Corey said Thursday.

In a keynote address at the 6th Annual OPIS LCFS & Carbon Markets Workshop here, Corey listed several key policy pushes, including the passing of AB 398 and AB 617, which established guidelines and targets to extend the state’s greenhouse gas reduction programs through 2030 as reasons California is leading the country in climate change policy.

“We have an opportunity to effectively implement this program in a way that really benefits every group. It’s an idea that I believe will yield results and will serve as a model for the rest of the country in the future.”


© Copyright by Oil Price Information Service (OPIS) by IHS Markit company, 9737 Washingtonian Blvd. Suite 200, Gaithersburg, MD 20878. Ethanol & Biodiesel Information Service (EBIS) is published weekly. OPIS does not guarantee the accuracy of these prices. Reproduction of this report without permission is prohibited. To order copies or a limited copyright waiver, contact OPIS Customer Service at 888.301.2645 (U.S. only), +1 301.284.2000 or [email protected]. Ethanol pricing inquiries, contact Spencer Kelly, 301.284.2022. Biodiesel inquiries, contact Tanya Lee, 301.284.2135. STAFF: Brad Addington, Edgar Ang, Jeff Barber, Ben Brockwell, Jennifer Brumback, Donna Calabria, Denton Cinquegrana, Brian Crotty, Jordan Godwin, Robert Gough, Beth Heinsohn, Michael Kelly, Spencer Kelly, Tom Kloza, Diane T. Miller, Jessica Nesterak, Renee Ortner, Michael Schneider, Mary Welge, Molly White


B.C. says greater biofuel blending key to hitting LCFS’ 2020 carbon target

A new report by the government of British Columbia says it’s “possible” the Canadian province will be able to meet its goal of cutting the carbon intensity of transportation fuels 10% from 2010 levels by 2020, but not without a sizable increase in the consumption of low carbon fuels that may hinge on the willingness of suppliers to reduce prices for higher renewable fuel blends.

The report released Friday marks the start of a second three-year review of the province’s Renewable and Low Carbon Fuel Requirements Regulation (RLCFRR) that will be followed by a public comment period and a series of consultation meetings.

The government said that because it does not expect electric vehicles to make a significant contribution to British Columbia’s transportation sector before 2025, meeting the 2020 target will be “heavily dependent on contributions from ethanol, biodiesel, HDRD [hydrogenation derived renewable diesel] and electricity for transit.”

LCFS credit prices could exceed $200/creditby 2020: Stillwater

SAN FRANCISCO – Low Carbon Fuel Standard (LCFS) credit prices will rise sharply over the next three years, likely blowing past the California Air Resources Board’s (CARB) soft Credit Clearance Market cap to above $200/credit in 2020, Stillwater Associates President Dave Hackett predicted Thursday.

Speaking at the 6th Annual OPIS LCFS & Carbon Markets Workshop here, Hackett presented an eye-opening slide that featured a graph with a sharp-rising line indicating an LCFS credit price forecast. The figures showed LCFS credit prices reaching $130/credit in 2018, $219/credit in 2019 and $225/credit in 2020.

California can meet LCFS targets by allowingE15 blends: Koehler

SAN FRANCISCO – California can easily meet its greenhouse gas emission reduction targets under the Low Carbon Fuel Standard (LCFS) if it would allow the sale E15 blends in the state, Pacific Ethanol CEO Neil Koehler said Thursday.

Speaking at the 6th Annual OPIS LCFS & Carbon Markets Workshop here, Koehler urged the California Air Resources Board (CARB) to modify currently regulations that prohibit the sale of gasoline blends above a 10% ethanol content, with an exception for E85, which has a waiver.

“Failing to allow E15 means California is missing a tremendous opportunity,”

Koehler said. “The magnitude of making such an easy change would be so significant for the program, but not doing something about it could be even more significant.”

EPA Administrator Pruitt says RINs market in need of reform, accountability

The Renewable Identification Number (RIN) credit market “needs some accountability,” EPA Administrator Scott Pruitt told the House Energy and Commerce Subcommittee on Environment Thursday, less than an hour after he left a White House meeting on the issue with a group of Republican senators, whose states are home to merchant refineries.

“It is a real issue as far as RIN reform,” Pruitt said in response to a question from Rep. Gene Green (D-Texas), who asked how EPA plans to address merchant refiners’ concerns over high RIN prices. “There is a lot of speculation that goes on with respect to RINs, there are enforcement issues, fraud that occurs; there’s a lot of work to be done to get reform and accountability in the RIN market,” Pruitt added.

Although Pruitt discussed a need for RIN reform, he did not include any color from the White House meeting he attended in between the morning and afternoon sessions of his hearing where RINs were the main topic of discussion.

december 11, 2017 • volume 14, issue 50 - · pdf filematerial at argo had started to...

Documents