Ethanol Blog
Myke Feinman Refine Fuels Reporter

Wednesday 07/24/13

U.S. Ethanol Producers Seen Tapping Brakes as Margins Narrow

Ethanol producers are seen cutting output in August, holding out for lower corn prices as the new crop is harvested this fall, according to Brandon Marshall, analyst for Northstar Commodity in Minneapolis, Minn.

"Ethanol plants are at a point where they will shut down in August for routine maintenance because the cost for corn is at a fairly substantial level," Marshall said. He said profit margins dropped to 6 cents per gallon last week compared to 20 cents gallon a month ago.

"Profit margins should continue to improve, but today's report is on the negative side toward production," he added.

The Energy Information Administration today reported the third consecutive weekly increase in domestic ethanol supply through July 19, which increased to 19.592 million bbl better than three-month high.

Meanwhile, U.S. ethanol production declined for the third straight week, sliding 22,000 bpd, or 2.7% to 850,000 bpd last week -- a 2-1/2 month low.

Myke Feinman can be reached at myke.feinman@telventdtn.com

Posted at 2:28PM CDT 07/24/13 by Myke Feinman
Comments (2)
Domestic Supply is at 17.6m ( not 19.6m stated above), right. This is just above 20 day supplyat current refiner mix rate. Supply even tighter if one considers non-refiner demand ( export and blending during summer). August shutdown is key to get the plants ready to run full-out when harvest brings in a lot of cheap corn.
Posted by Eddy Lahens at 4:14PM CDT 07/24/13
This market is so unstable its ridiculous, one week inventory grows next week its down . Ethanol has benefited the American farmer and rural economy, with out a doubt. But the American consumer has paid a price one way or the other. For the vast majority of people Ethanol is a joke.
Posted by GWL 61 at 6:40PM CDT 07/25/13
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