Ethanol demand rose through the end of this past week with overall implied demand increasing 252,000 gallons per day. The main focus of this increase comes from the overall jump in demand for motor fuels last week compared to the week earlier. Total motor gasoline implied demand increased 4.6 million gallons during that time period. The growth in overall demand for gasoline helped to support the strong price rally over the last week, and solidified gains price support in ethanol futures. Total ethanol inventory levels fell 1.5% (or 11.6 million gallons) for the week with total stocks reported at 844.2 million gallons. This is only 1.4% over year-ago stock levels, meaning that large carryover seen a few weeks ago is starting to steadily erode. Although there is a lot more room to move in inventory reductions, the increased demand for both ethanol and gasoline is a welcome sight for an industry that has been caught with large stockpiles over the last year. Given the recent movement in prices of both ethanol and gasoline, overall demand could swiftly change from week to week, which may lead to even more volatility in inventory levels through the remainder of the spring.
Rick Kment can be reached at email@example.com
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