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Weekly production fell from 1.055 million barrels per day to 1.040. This is the second week of lower production. Negative margins are finally having an effect. This week’s production number was still very strong at 6.7% over last year. Year to date production is still fantastic at 5% over last year. USDA’s goal is only for a 2.8% increase.
As a reminder, we are still concerned about the low corn for ethanol efficiency implied by recent reports. That would be even more bullish for corn if they continue.
Allendale looks for another 50 – 100 million bushels added to USDA’s current corn for ethanol estimates. That will be added over the next 1 – 3 months. On the other hand, feed/residual still needs to be cut by 100 million. That won’t happen until the April supply/demand report.
For now, ethanol remains a bullish balancing factor to the bearish feed/residual issue.Ethanol Production, Nelson's Notes | Comments Off on Weekly Ethanol Production 2-15-2017