US weekly ethanol production falls below 1 m b/d for first time since May

US weekly ethanol production in the week ending August 12 fell below 1 million barrels per day (b/d) for the first time since mid-May, data published by the US Energy Information Administration (EIA) showed on Wednesday.

Total weekly US ethanol production decreased by 39,000 barrels to 983,000 barrels, according to the EIA.

The dip was solely driven by declining output in the Midwest of the US - home to the majority of the country's total ethanol production capacity – where figures fell to 926,000 b/d from 965,000 a week earlier.

The dip was unexpected by analysts who had polled for weekly US ethanol production to remain at last week's levels of 1.02 m b/d.

Over the week, full production equated to consumption of 2.53 million mt of corn, down from 2.63 million mt a week earlier.

Meanwhile, ethanol stockpiles were boosted by 190,000 barrels to 23.4 million barrels in the period covered by the report.

The increase exceeded analyst expectations, which had called for a week-on-week increase of 24,000 barrels.

Margins calculated through a model from Iowa State University showed that the estimated return over operating costs for the average Midwest-based plant fell in the week ending August 12 to $0.10/gallon from $0.13 a week earlier.

Corn prices for the week remained more or less stable with levels recorded a week earlier, averaging $7.40/bu.

Finished ethanol prices meanwhile fell by 6 cents week-on-week to $2.44/gallon.