Ethanol Blog

The turning of seasons is creating some additional interest in gasoline and ethanol supplies as both markets posted a moderate-to-strong reduction in inventory levels at the end of last week.

The move to higher demand before the spring and summer driving season is no surprise to the market, but the shift as to how product is moving away from storage facilities is catching the eye of the market.

But even though ethanol supplies fell 1.7% from week-ago levels, the news is not all positive, as supplies currently are still 36% ahead of year-ago levels. Production of ethanol continued to increase for the second straight week, which could quickly erode continued falling ethanol supplies through the end of March and first half of April.

The inventory shift brought some short-term support to prices midweek, but the overall long-term tone of the market is likely to be unchanged with many traders still concerned about growth in crude oil supplies and the ability to aggressively strengthen ethanol production through the spring and summer months based on available corn supplies.

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

(ES)

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