Ethanol Blog

Ethanol production at the end of last week fell aggressively lower. Total production is listed at 36.4 million gallons per day. Production fell 5.5% from the week previous with a total decline in production of 2.1 million gallons per day.

This move is significant because it is the first time in three months that total production has fallen below an average of 37.8 million gallons per day. Even with the decline in production levels through early 2014, production levels are 10.7% ahead of production at this time one year ago.

Even with corn hovering just over $4 per bushel during the last several weeks, there is starting to be concern that even at these levels, production will not be sustained.

The lack of support in distillers grain prices following GMO concerns in exported product and sluggish moves in ethanol prices are starting to erode plant margins. Demand for ethanol is not expected to see significant support until late spring months when driving activity increases along seasonal patterns.

For now, ethanol production may continue to ebb and flow, but will likely remain well above year-ago levels despite any strong shifts seen from week to week.

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

(ES)

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