Aggressive gains quickly developed across the ethanol market Wednesday morning following the latest release of EIA ethanol market data. This report posted a combination of lower stock levels and lower production at the end of last week.
Transportation issues due to adverse weather over the last several weeks contributed to several plants slowing production schedules in order to have enough room for ethanol being produced.
These transportation issues are being cleared up over the last week or so, but the focus now is being put on a strong drop of overall stocks and slower production. Total production fell 2.8% from week-ago levels, but it is important to keep in mind that production still is outpacing 2013 by 9%. Total inventory of ethanol slipped 4.2% from the week previous, and is nearly 15% under year-ago levels. Although this is not yet creating strong concern about tight supplies in the market, there is enough incentive to spark strong gains in nearby contracts midweek.
Rick Kment can be reached at firstname.lastname@example.org
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