US ethanol production roars back with 65,000 b/d increase to 1.06 m b/d

US ethanol production surged 65,000 barrels per day in the week ending January 12, topping 1.061 million barrels per day and providing some supportive news for US corn prices, data from the US Energy Information Administration showed Thursday.

Implied corn consumption jumped 7 million bushels to 111.4 bushels on the back of the increase, putting demand on course to surpass the USDA’s corn-to-ethanol consumption estimate of 5.525 billion bushels in the 2017/18 marketing year.

Ethanol stocks were also largely unchanged week-on-week, holding at 22.7 million barrels and showing only a modest 24,000-barrel increase.

Ethanol production has fallen in recent weeks as low margins have cut incentives for producers, but steady demand, an increase in higher blend ethanol mixes and relatively expensive mineral fuel costs have incentivised ethanol consumption.