Production at U.S. ethanol plants eased 14,000 bpd to 913,000 bpd during the week ended Nov. 29, according to data out Wednesday from the Energy Information Administration. The decline has prompted head scratching by at least one analyst, who believes output should ramp higher amid very strong producer margins.
"The biggest mystery is why production isn't going [higher]," commented Jerrod Kitt, strategist for the Linn Group, Chicago, Ill. "Why aren't we producing [more] with a margin average of 90 cents a gallon? That's the best margins you've seen, even better than 2011. You have to go back to 2006 or 2007 to see anything comparable."
EIA showed ethanol supply remains low, especially in the New York Harbor market, with spot values in the Harbor and at the key Chicago market climbing each day this week in the product-short markets.
Myke Feinman can be reached at email@example.com.
© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.