Estimated crush margins for ethanol producers in Europe narrowed Tuesday to multi-day lows as rising feedstock prices cut into healthy spreads.
As the T2 ethanol assessment held steady at Eur563/cu m, based on the Platts 1630 London assessment, the front-month Paris milling wheat contract increased to Eur163.25/mt from Eur162.25/mt Monday and the front-month Paris corn contract rose to a near 200-day high of Eur168.75/mt from Eur165.75/mt Monday.
This sent the estimated milling wheat crush spread to 122.23/cu m, down from 124.93/cu m, the lowest level since Friday, while the corn crush spread fell to 107.38/cu m from 115.48/cu m, the lowest level since May 17.
European grain prices were seeing strength as a result of the end of the marketing year, with supplies reduced until the switch to the new crop in the next few weeks.
Despite the day-on-day falls, margins were still healthy for producers, which allowed for some downside in ethanol prices, according to one source.
However, with uncertainty over supply resulting from the bankruptcy and lack of production at Abengoa's 480,000 cu m/year capacity Rotterdam plant and CropEnergies' 400,000 cu m/year UK-based Ensus plant not expected to produce until July, one source said price direction was bullish.