US weekly ethanol output declines, stockpiles fall to six-month low

US ethanol production unexpectedly declined in the week ending May 19, while stocks tumbled to a six-month low, data published by the US Energy Information Administration (EIA) showed Wednesday.

Total ethanol production in the US decreased by 4,000 barrels per day (b/d) to 983,000 b/d in the reporting week.

The weekly decrease was a surprise to analysts, whose estimates ranged from a 5,000-barrel to a 10,000-barrel week-on-week increase.

Total ethanol production in the Midwest – home to over 90% of total US ethanol production capacity – dropped by 1,000 b/d to 931,000 b/d, according to the EIA.

Over the week, full production equated to the consumption of 2.53 million mt of corn, down from 2.54 million mt a week earlier.

Ethanol stocks declined by 1.1 million barrels to 22 million barrels in the period covered by the report, the lowest level since the week ending November 11.

The stock decrease was much larger than expected by analysts, who projected a week-on-week decline of between 50,000 to 100,000 barrels.

Margins calculated through a model from Iowa State University showed that the estimated return over operating costs for the average Midwest-based plant rose by 3 c/gallon to $0.63/gallon in the week ending May 19.

Corn prices for the week meanwhile slipped by 2 c/bu during the week to an average of $5.92/bu.

Finished ethanol prices increased by 3 c/gallon to $2.35/gallon.