Total ethanol inventory levels moved higher in the last week of October to 638.4 million gallons. This move is after posting the lowest inventory level since EIA has been collecting data in 2010.
The move higher accounts for a growth of 8.4 million gallons of ethanol through the week. This stock level still remains 16.4% below year-ago levels and represents a relatively tight supply on the market. Weakening demand was the biggest reason for the increased inventory levels.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT T
But a slowing demand of gasoline and ethanol is not unusual through the end of October. This could lead to additional inventory building over the coming weeks and months no matter if ethanol production rises or falls slightly during coming weeks. Ethanol production for the week ending Nov. 1 also fell by 378,000 gallons per day, or 1% from week-ago levels. Production is up 9% from year-ago levels.
Production shifts are likely to ebb and flow over the coming weeks and months and will likely be more a factor of corn price and corn availability than an outlook in the long-term ethanol demand. Ethanol stocks seem to be well positioned heading into the end of the year, given stable supply levels and manageable inventory levels.
Rick Kment can be reached at firstname.lastname@example.org
© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.