Historically low ethanol stocks and tight corn feedstock availability seen limiting domestic ethanol production are expected to boost ethanol spot values.
"Corn supplies continue to get harder and harder to find so I think production struggles to increase rapidly from here despite very good margins," said Jason Ward, director of grains and energy for Northstar Commodity of Minneapolis, Minn.
Ethanol production was down 4.3% from a year ago for the week-ended May 24, Energy Information Administration data released today detailed. Total U.S. ethanol supply was down 200,000 bbl to 16.0 million with the inventory level the lowest since EIA began reporting weekly ethanol supply in June 2010.
"Stocks should continue to move lower which will continue to support price. All in all, this looks positive to the ethanol margin outlook for the plants," Ward added.
Myke Feinman can be reached at email@example.com.
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