Trade Resources Market View February Production of Corn-Based Ethanol in The US Lowered by 125.01 Million Gallons

February Production of Corn-Based Ethanol in The US Lowered by 125.01 Million Gallons

February production of corn-based ethanol in the US lowered by 125.01 million gallons, or 10.76%, to an 11-month low of 1.04 billion gallons, US Environmental Protection Agency data showed Friday.

The drop in ethanol production was unsurprising to sources as delayed rail return times to plants forced reduced run rates and a significant drop in production.

"If you think those numbers are nuts, wait until March comes out," one trader said. "We'll be lucky if we hit 900 [million gallons]."

US ethanol prices have soared in recent weeks as supply concerns continue to send a resounding bullish sentiment throughout the market. Delayed return times on railcar deliveries, caused primarily by severe freezing weather and a higher demand for railcar space, was the root of the price surge throughout February, sources said.

The Platts Chicago Argo ethanol assessment hit $3.24/gal Friday, up $1.1850/gal from a month ago to the highest level since July 2006, around the time when ethanol took over for MTBE as the gasoline additive of choice in the US.

Now, most Midwest ethanol plants have reached their on-site storage capacity and have been forced to run at reduced rates or shut down entirely. One producer source estimated that 'nearly 90%' of plants are running at slowed rates, while 'nearly a dozen' have gone offline entirely until the rail logistics issues ease.

On top of that, April is regarded as the month for annual maintenance and inspections for most US ethanol production facilities, sources said. That is expected to place even more pressure on supplies as production will slow significantly in the coming weeks.

Overall US ethanol stocks for the week ended March 14 slumped 691,000 barrels to 15.277 million barrels, a 15-week low, Energy Information Administration data showed Wednesday.

Overall stocks were 3.188 million barrels, or 18.9%, lower than one year ago, in large part due to East Coast stocks being 1.86 million barrels, or 34.45%, lower than their year-ago mark.

Source: http://news.chemnet.com/Chemical-News/detail-2275152.html
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US Corn-Based Ethanol Production Falls 10.76% to 11-Month Low
Topics: Chemicals