Corn market fragility sparks fears

In mid-June, ethanol production climbed to record high levels, largely as a result of the recent corn market instability.

Throughout the late spring and early summer, ethanol plants embraced lower corn prices and healthy profit margins, which led to a production hike. June's developments suggest there is a surplus supply of ethanol and has the industry worried.

The industry is unsure as to how much long-term support will remain in the ethanol or reformulated blendstock for oxygenate blending (RBOB) petrol markets given the lack of promising growth in the economy at present.

For the foreseeable future, ethanol prices are expected to experience little change, with producers looking at petrol demand, and corn availability and prices.