Following strong losses in the ethanol supplies through the end of June, inventory levels rebounded significantly the first week of July. Even though the Independence Day holiday is expected to have helped to stimulate additional demand, growing production levels of ethanol over the last week has helped stopped the downward slide of inventory.
Ethanol production last week increased 2.2% with total production listed at 37 million gallons per day. Total inventory levels are listed at 659.4 million gallons will likely continue to adjust higher and lower through the upcoming weeks. A similar rebound in ethanol inventory levels developed the week of Memorial Day while the weeks previous to the holiday posted moderate to strong reductions.
There is growing uncertainty, given the sharp rally in energy prices and expected seasonal decline in demand about longer-term movement of inventory levels. Ethanol production remains higher than last year levels, but the volatility in the corn market is expected to also keep that level adjusting. This will likely keep both production levels and inventory moving in roller coaster fashion.
Rick Kment can be reached at firstname.lastname@example.org
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