Summary: US ethanol production was up 5% following declines in the previous two weeks. Despite the surge in production, ethanol stocks rose slightly less than half-a-percent. It is estimated that blender demand was up nearly 6% following a 6% decline the previous week. The futures-based producer margin improved and is nearly at break-even. Some measures of “cash-based” producer margins indicate that returns are above break-even. Blender margins improved but remain low. The spread between Brazilian and US ethanol prices remains well below a year ago and the lowest in over 3 years, indicating that US ethanol is losing it price competitiveness relative to Brazilian ethanol. In the Dec WASDE, USDA lowered their projection for corn grind by 50 Mil Bu to 5,600 Mil Bu.
US ethanol production through the week ending last Friday totaled 309 million gallons vs 294 the previous week and 312 a year ago.
Ethanol stocks last week totaled 981 million gallons, up 4 million from the previous week and up 3% from last year.
Gasoline stocks last week totaled 256 million barrels, up 8 million from the previous week and up 6% from last year.
US crude inventories were 437 million barrels, down 3 million from a week ago but up 6% from last year.
The futures-based ethanol crush margin is displayed above.
The futures-based blenders’ margin is displayed above.
The spread between Brazilian and US ethanol FOB prices was lower this past week, and is well below what it was at this time in each of the last three years.