US weekly ethanol production, stockpiles tumble below expectations

Total US weekly ethanol production and stockpiles both declined in the week ending November 11, landing below market expectations, data published by the US Energy Information Administration (EIA) showed on Wednesday.

US ethanol production decreased week-on-week by 40,000 barrels to 1.01 million barrels per day (bpd) the data showed, coming in below analyst expectations, which had called for a reduction of 4,000 barrels from the previous week to around 1.05 million barrels.

The production reduction was largely due to a lower 38,000 bpd ethanol output in the Midwest – home to the majority of the country's production capacity.

Over the week, full production equated to the consumption of 2.6 million mt of corn, down from 2.71 million mt a week earlier.

Ethanol stockpiles substantially dropped by 894,000 barrels to 21.3 million barrels in the period covered by the report.

The stockpile decrease had not been predicted by analysts, who had polled for a week-on-week inventory rise of 126,000 barrels.

Declines in weekly stocks were observed across all regions except the Midwest, with the biggest decline of 835,000 barrels coming from the East Coast.

Corn prices for the week averaged $6.50/bu – a 20-cent decrease from levels recorded a week earlier.

Finished ethanol prices meanwhile remained unchanged at $2.48/gallon.

Margins calculated through a model from Iowa State University showed that the estimated return over operating costs for the average Midwest-based plant increased by around $0.07/gallon in the week ending November 11 to $0.52/gallon.