Following a strong price slide during the last two weeks, ethanol futures closed July with sharp gains Wednesday. Nearby prices gained 5 to 6 cents per gallon, as traders look for additional support following news of lower stock levels.
Total ethanol inventory levels fell 33.6 million gallons or 4.7% at the end of last week. This moved total stocks to 693 million gallons. Current inventory levels sit at 15.2% lower than year-ago levels, and are likely to carry this decrease into the end of the year. Although there is some focus on overall ethanol demand growth during the last two weeks due to the lower price levels, the major focus comes as ethanol production fell at the end of last week. Total production fell 2.5% from the previous week, slipping 0.8 million gallons per day. Current production rate holds at 34.9 million gallons per day. The shift in corn prices over the last couple of weeks could continue to shift production levels higher and lower depending on local market availability.
Rick Kment can be reached at email@example.com
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