Ethanol Futures Slide on Corn Weakness

Corn futures posted moderate losses Tuesday, with traders remaining focused on the underlying pressure through the entire grain complex as well as a generally strong start to the 2026 growing season with rain or rain forecasts developing through much of the Midwest during early June. Little significant fundamental or technical shifts are seen in demand levels over the past couple of days, keeping traders generally defensive. July corn closed down 3 1/2 cents per bushel at $4.40 1/2 and September corn was down 4 3/4 cents at $4.48. Monday, USDA reported 67% of the U.S. corn crop is considered to be in good-to-excellent condition, a decent rating although a touch lower than the prior 10-year average for the opening score. At this point in late May/early June last year, the crop was rated at 69% good to excellent. However, more perhaps than the rating, price pressure is stemming from the two-week precipitation map, set to feature plenty of rainfall across the U.S. Corn Belt. There may be some dry pockets that emerge (southern Illinois and Indiana stand out), but those will likely need to be monitored on a case-by-case basis with the overall situation still appearing friendly to growth. USDA reported U.S. ethanol plants used 427.7 million bushels (mb) of corn in April, down 10% from March, which was expected. Through the marketing year, corn usage has reached 3.653 billion bushels (bb) and is up less than 1% from the same point in 2025. USDA is still expecting a 3% annual increase in corn demand for fuel ethanol. “The world corn situation also leans bearish in the immediate outlook, with Argentina in the process of harvesting a record large crop. Meanwhile, crop estimates in Brazil continue to grow as well, with IMEA (Brazil) on Monday increasing their forecast for Mato Grosso’s safrinha corn crop (the top producing state). The DTN National Corn Index finished Monday at $4.08. Tuesday’s futures close and Monday’s national average corn basis of 36 cents under the July board would indicate the index on Tuesday afternoon to be near $4.04,” stated DTN Lead Analyst Rhett Montgomery.

Ethanol futures shifted lower Tuesday with the most aggressive losses seen in lightly traded but defensive June contracts. June ethanol futures posted a 3-cent-per-gallon loss, falling to $1.9575 per gallon. All contracts through spring of 2027 posted moderate to firm losses, creating some additional concern that additional pressure may be seen across the overall complex. Market stability in nearby futures is seen with all contracts through September trading within a 2-cent market range. This is evaporating any seasonal market shifts which are typically developing during the summer months.

Cash ethanol prices fell Tuesday with the national average prices sliding 1.28 cents per gallon, moving to $2.3199 per gallon. All but two reporting states posted lower prices, although the majority of states reported prices falling between 1 and 2 cents per gallon lower Tuesday. Spot ethanol prices continued lower Tuesday afternoon. East Coast markets posted 1.25-cent loss, while Midwest prices were 1.25 to 1.5 cents lower per gallon. Prices are $1.98 to $1.9875 per gallon in the Midwest, and $2.06 per gallon on the East Coast. RIN price levels are higher. Current 2026 RIN prices are 0.6 cent higher at $2.31 per gallon, 2025 RIN prices are 1.5 cents higher at $2.30 per gallon.

Crude oil futures rallied once again Tuesday, with July contracts leading the market higher with a $1.60-per-barrel shift, moving prices to $93.76 a barrel. As with the entire market since the start of the Iran market concerns, nearby contracts are the most actively traded and impacted market, as traders continue to hold out for a longer-lasting resolution that will mute the market volatility in deferred contract months. The pullback from prices well above $100 per barrel during the last half of May has helped to ease concerns slightly, but strong daily moves like those seen Tuesday, could once again affect most other markets. Crude buying Tuesday extending the gains from yesterday’s session as signing of the U.S.-Iran Memorandum of Understanding to discuss ways to end the gulf crisis gets delayed. In addition, a global energy watchdog warned of accelerating crude oil inventory depletion. Last week, an Axios report stating that a Memorandum of Understanding has been prepared for U.S. President Donald Trump’s final approval calmed markets, easing oil prices.

RBOB gasoline futures moved higher following a strong downward turn through the end of May and initial June trading session. July futures settled 5.96 cents per gallon higher, closing at $3.1441 per gallon. Similar gains were seen in all summer contracts as traders focus on crude oil prices shifting higher once again and concerns of peace in the Middle East continue to limit energy selling activity. Although prices are moving higher now, the recent pressure has been seen throughout the country with EIA reporting, the national average for retail regular gasoline moved lower during the week ended June 1, with declines reported across all major regions, data from the U.S. Energy Information Administration showed Tuesday. The U.S. average for regular gasoline fell by 17 cents to $4.305 a gallon last week, standing $1.178 higher compared with the same week last year, the EIA’s weekly update on fuel pricing showed. East Coast (PADD 1) gasoline fell by 16.9 cents to $4.135 gallon in the week ended June 1, while standing $1.159 higher than the same period last year. Within the East Coast, New England (PADD 1A) gasoline prices declined by 9.3 cents to $4.362 gallon week-over-week, standing $1.390 above the same week of 2025.