Thune pushes year-round E15 and farm bill on the campaign trail as ethanol stays cheap
Senate Majority Leader John Thune backed year-round E15 while campaigning in Minnesota with candidate Tafoya, tying it to the stalled farm bill. For ethanol producers that is the fight that matters most right now. A permanent fix would let retailers sell the 15 percent blend through the summer driving months instead of pulling it when warm-weather fuel-volatility rules kick in, which is when the extra corn ethanol gets sold.
Year-round E15
The summer block has been the ceiling on ethanol demand for years. EPA waivers and state-by-state workarounds have kept E15 on the pump in parts of the Midwest, but retailers outside those states still face the seasonal cutoff, so a blender or c-store operator can't count on selling it every month. Thune tying E15 to the farm bill puts it in a vehicle that could actually move, though the farm bill itself has been stuck. Worth watching whether the two ride together or the E15 piece gets split off again.
Cheap ethanol
Ethanol is trading cheap, which Ethanol Producer Magazine flagged as a buying opportunity for blenders. Cheap ethanol helps the blend economics: when the ethanol gallon comes in well under the gasoline gallon it displaces, splash-blending E10 and E15 pays, and that pull is part of what the E15 push is trying to widen. The flip side is thin producer margins, so the bargain for blenders is pressure on the plants.
China's export freeze
Brent is holding near $100 as Gulf crude flows recover into high freight and tanker risk. The piece that reaches US product markets is China: Beijing's Ministry of Commerce stopped issuing refined-product export licenses, and several state-owned firms cancelled October-loading cargoes. Less Chinese diesel and gasoline on the water tightens the Asian product market, and a tighter Asia pulls barrels and firms up cracks worldwide, including the Gulf Coast where US refiners and exporters sell. It doesn't touch the ethanol story directly, but it sets the gasoline price that E15 blends into.
One foreign item to note and set aside: SunBridge BioEnergy started commercial ethanol production at its Seoni plant in India. That's India's own supply, not a barrel headed for the US market, so it doesn't move anything a US operator prices off of.
What to watch
Whether Thune actually attaches E15 to a farm bill that can pass, or it slips to a standalone bill again. Whether cheap ethanol holds or producers pull back output to defend margins. And whether China's license freeze runs into November loadings, which would keep product cracks firm into winter.