Heat Wave Cuts US Ethanol Production, But Margins Hold Firm
US ethanol production declined by 28,000 barrels per day over the past week due to high temperatures in some regions reducing plant efficiency. Despite this, average daily production was still up 17,000 from last year as producers respond to demand expectations and solid margins. Iowa State University's Center for Agricultural and Rural Development reported that operating margins for the average Iowa ethanol plant remained positive and higher than at this time last year.
Ethanol stocks rose by 323,000 barrels to 25.121 million, with a surplus of 2.433 million barrels compared to the same week last year. The Renewable Fuels Association noted that net inputs of ethanol purchased by refiners and blenders increased, despite gasoline supply hitting an 11-week low.
Ethanol exports averaged 129,000 barrels per day, up from the previous week but down 43,000 from last year's levels. With the USDA set to release its updated corn for ethanol use projection on September 11th, producers will be watching closely.