The estimated production margin for a typical US Midwest dry-mill ethanol plant in the week ending Friday fell 8.98 cents, or 15.04%, to a 28-week low of 50.73 cents/gal, a review of US Department of Agriculture and Platts data showed.
The softening in the margin came as higher feedstock and input costs outweighed a slightly higher ethanol price.
The weekly average estimated delivered feedstock corn cost strengthened 7.89 cents, or 1.85%, to $4.3406/bushel amid firmer demand, analysts said.
The weekly average estimated dried distillers grain byproduct price rose $5.55/st to $187.18/st.
The estimated denaturant cost slumped 2.76 cents to $2.0665/gal, while the estimated monthly natural gas cost rocketed $3.37/MMBtu, or 70.8%, higher to $8.13/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 January 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 rose 3.51 cents, or 1.86%, to $1.8905/gal as demand began to build steam near the end of the week and supply appeared to be on the downturn, sources said.
Overall US ethanol stocks fell 193,000 barrels to 16.739 million barrels, while weekly ethanol production across the US fell 5,000 b/d to 895,000 b/d, US Energy Information Administration data showed Wednesday.
The estimated production margin for a typical dry-mill ethanol plant was calculated by weighing data from Platts and government agencies, including average delivered corn cost, dried distiller grain prices, natural gas prices, certain blending costs and ethanol prices.
Fixed-cost calculations were based on a 50 million gal/year capacity Midwestern plant with 32 employees working at an average salary of $47,300/year.
