The estimated weekly production margin for a typical US Midwest dry-mill ethanol plant fell 7.81 cents, or 11.23%, this week to an 11-week low of 61.7 cents/gal, according to a Platts estimate based on a review of data.
The margin is at the lowest level since August 23, when it was at 60.43 cents/gal.
The weaker ethanol production margin is the result of a much greater proportional decrease in the ethanol price than the cost of corn, a higher dried distillers grain byproduct price and a lower denaturant cost.
The weekly average estimated delivered feedstock corn cost has fallen for 10 straight weeks, dropping 8.17 cents, or 1.91%, this week to $4.1915/bushel, the lowest level since at least September 10, 2010, on increased supplies from the ongoing harvest in the Midwest, the largest corn-producing region in the US by volume, sources said. Data before September 10, 2010, was not available.
The weekly average estimated dried distillers grain byproduct price, however, has risen for the past three weeking, and this week jumped $1.85 to a five-week high of $203.84/st.
The estimated denaturant cost is on a three-week slide, falling 6.8 cents this week to a 19-week low of $1.9510/gal on weaker demand from Canada, sources said. The estimated natural gas cost was unchanged at $3.71/MMBtu.
The denaturant cost was based on the weekly average of the Platts natural gasoline assessment at the Conway, Kansas, hub, while the gas cost was based on the November Platts Chicago ANR 7 pipeline monthly index.
The estimated ethanol price used in calculating the margin was the weekly average of the Platts Chicago Argo ethanol assessment, which dove 11.58 cents, or 6.67%, to $1.7373/gal, the ninth consecutive week of declines to the lowest level in more than three years. It had not been this low since July 30, 2010, when it was $1.6730/gal.
The lower estimated ethanol price this week was on both higher stocks and weaker corn futures, sources said.
US ethanol stocks jumped 204,000 barrels to 15.165 million barrels for the reporting week ended November 1, the Energy Information Administration said Wednesday.
December corn futures on the Chicago Board of Trade had an average settlement this week of $4.2395/bushel, down $6.36/gal from the previous week, on market talk of higher-than-expected yields in the ongoing corn harvest in the Midwest, analysts said.
