Ethanol Blog

Lack of consistency in the ethanol market, especially movement of inventory levels, seems to be the focus through the summer. According to the latest EIA report released Wednesday morning, total ethanol supplies slipped 1.7% or 12.6 million gallons from the prior week. Total inventory levels are listed at 689.8 million gallons.

This level is the lowest since the first week of July, and down 11% from year-ago levels. This reduction of inventory levels comes when ethanol production fell 168,000 gallons per day at the end of last week.

If ethanol production continues to climb through the next few months based on the lower corn prices, there could be additional widespread inventory building before the end of the year. Lower ethanol imports were more than adequate to offset the slip in overall demand for ethanol from blenders. But as summer comes to an end, evidence of reduced driving demand becomes a bigger reality that could keep markets vulnerable. This will likely keep inventory levels bouncing up and down through the next several months.

Rick Kment can be reached at rick.kment@telventdtn.com

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