Ethanol Blog

Price Surge on Tighter Supplies

Rick Kment
By  Rick Kment , DTN Analyst
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Lower corn prices Tuesday led to prices falling in the ethanol markets. However, sharp gains redeveloped Wednesday. The announcement that ethanol inventory levels fell over 25 million gallons in the last week has shocked the market back into a sharp rally.

This shift in supply is 3.5% less than previous week levels, and 18.9% under year-ago levels. Ethanol production declined 252,000 gallons per day according to the report, but the biggest movement was the increase in blender and refiner demand.

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The lower corn prices over the last two months did very little to spark ethanol production beyond marginal levels. Ethanol production is currently over year-ago levels, but this is not likely to help to build supplies over the coming weeks.

It is uncertain just how much follow-through support will develop through the end of the week, given the up-and-down shifts in prices in the last couple of days.

Rick Kment can be reached at


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