You are assuming the economics for corn-based ethanol resemble a free market. They do not.
Government regulation, both state and federal, ensure that fuel distributors have to buy a certain amount of ethanol. Lower fuel prices means more demand for gasoline. Higher gasoline sales means more demand for ethanol to blend with gas.
That is not to say low oil prices won't hurt grain prices. There are a lot of countries that buy US grain with their oil dollars. If they can't produce oil profitably, they can't buy our grain.
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Today's Featured Article - Good As New - by Bill Goodwin. In the summer of 1995, my father, Russ Goodwin, and I acquired the 1945 Farmall B that my grandfather used as an overseer on a farm in Waynesboro, Georgia. After my grandfather�s death in 1955, J.P. Rollins, son of the landowner, used the tractor. In the winter 1985, while in his possession the engine block cracked and was unrepairable. He had told my father
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