Ethanol Production

Ethanol Production

Production: 1.117 mb/day
Weekly Total: 7.819 mil bbl
Stocks: 24.690 mil bbl
Corn Used: 111.25 vs 98.76 needed

Analysis 

Production surged to 1.117 mb/day, a new seasonal high for this week of the year and up 3.8% from year ago levels. Stocks built modestly to 24.690M barrels.

Corn rallied to 441.50 on the week, reclaiming both the 20 day moving average near 427 and the 200 day near 441. The 14 day RSI has climbed to 70.7, pushing into overbought territory after the sharp bounce off the 394.50 area lows from earlier this month. A close above 447, the recent 20 day high, would confirm further upside momentum, while failure to hold the 440 area (200 day) on any pullback would suggest the bounce is fading. 

Ethanol futures settled at $1.955/gal, still below the 20 day and 50 day but holding above the 200 day near $1.93. The crush margin narrowed to roughly $1.06/bu as corn’s rally compressed the spread, the tightest level in recent weeks though still above breakeven. Ethanol’s discount to RBOB gasoline near $2.96 held at 34%, keeping the blending incentive at about $1.00/gal.