Ethanol Production

Weekly Ethanol Production

Production: 1.040 mb/day
Weekly Total: 7.280 mil bbl
Stocks: 24.391 mil bbl
Corn Used: 103.58 vs 96.75 needed

Analysis 

1.040 million barrels per day, down 4.8% on the week, below the five year average for this week of the year, and stocks still built. Implied demand at 6.817 million barrels is the weakest print on the table going back to late April.

Stocks at 24.391 million set a new seasonal high and now sit 3.2% above year ago and 1.5 million above the five year average. Last week’s 762,000 barrel draw was a one off. The pace metric has compressed to 7.1% above USDA’s needed rate, down from 11.6% a week ago.

Corn settled Tuesday at 460.50, above all three major moving averages with the 20 day at 440, the 50 day at 448, and the 200 day at 442. RBOB at $3.23 has rallied above its 20 and 50 day, widening the ethanol discount to roughly 39%. Ethanol futures last traded 6/30 at $1.955, making the crush margin calculation stale, but even at that level it has compressed to around $0.87/bu with corn 20 cents higher. A close in corn above the recent swing high near 464 opens the door to the 480 area.