Ethanol prices turned lower Wednesday following the latest EIA report data which posted a strong bounce in ethanol inventories at the end of last week. Weekly inventory levels increased 2.5% or 16.5 million gallons in just one week. Total ethanol supplies are currently at 657.4 million gallons. This is still 10.3% under year-ago levels, and could help keep buyers aggressive going into the summer driving season.
This inventory boost came as overall ethanol production across the country slipped slightly. Total ethanol production fell 0.7% or 252,000 gallons of ethanol per day. The recent support in corn prices are still overshadowing aggressive production margins and limiting some producers from ramping up too fast. It is also hard for some of these plants to produce much more on a short-term basis, based on the ability to move product out of the plant and into the inventory systems.
Inventory and production is expected to see some additional volatile shifts over the next several weeks, but the market is still likely to remain bullish.
Rick Kment can be reached at firstname.lastname@example.org
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