Ethanol Blog

The expectation that the return to production by some of the previously idled ethanol plants would increase the glut of ethanol has not been the case through February.

As overall ethanol production continues to ramp up, due to plants already in production hitting the accelerator even harder and some of the idled plants coming back on line, ethanol production has seen strong gains.

At the end of last week, ethanol production through the country is listed at 34.1 million gallons per day. This has seen ethanol production growth since the last full week in January. But even though production is increasing, levels are still nearly 10% under year-ago levels.

This is due to the currently poor margins still seen by processors and high corn prices. Ethanol inventory levels, which have been the center of concern during the last year, continue to drop.

The weekly slide of 4.2 million gallons brought overall inventory levels to 814.8 million gallons. This brings total ethanol inventory to under a 24-day supply on hand. Even though the inventory levels are near three-month lows, additional clearance is going to have to be needed in order to draw significant long buyer interest back into the ethanol market.

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

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