The focus of tighter ethanol supplies is once again being seen as a past issue despite the drawdown of supplies during the Christmas week. The week of New Year's, ending January 3, posted a jump in ethanol inventory levels of 25.2 million gallons. This is a 3.6% increase over the last week, and the highest level since the middle of September.
Still, supplies are 155.4 million gallons, or 18.9% under inventory levels the first week of January 2013. But the significant change in overall market availability of product over the last two months is creating some concerns through the industry.
If ethanol production continues to strengthen through the winter and spring months due to stable corn supplies, and ethanol demand remains lackluster along seasonal patterns, inventory levels could continue to quickly build to previous levels. This would likely add additional aggressive pressure to ethanol prices both in the futures and cash markets.
Rick Kment can be reached at firstname.lastname@example.org
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