-Ethanol production falls to 26-week low – below year ago levels
-Ethanol stocks decline slightly
In the last full week of the 2020/21 U.S. corn marketing year, for the week ended 8/27/21, U.S. ethanol production fell to a 26-week low of 905k barrels/day (266 million gallons/week) from 933k bpd (274 mil gal/week) the week prior, reflecting lower production than last year’s same-week 922k bpd (271 mil gal/week), the first year-over-year shortfall in production in 23 weeks and, even more discouraging, was the lowest production for the last week of August in nine years. Moreover, this week’s production was nearly 11% below 2019 same-week production of 1.013 million bpd (298 mil gal/week). With the rather weak ethanol production of late, the USDA’s 5.075 billion bushel corn for ethanol usage estimate clearly appears too high, with our current expectations being closer to 5.035-5.040 billion bushels, down 35-40 million bushels. USDA’s monthly Grain Crushings report out this afternoon, providing July data, will help clarify the situation ahead of the September 10 WASDE report.
Despite the continued decline in production, U.S. ethanol stocks declined only slightly last week to 887 million gallons (21.110 mil barrels) from 891 mil gallons (21.223 mil barrels) the week prior, with the 4.7 million gallon decline being the smallest in four weeks and leaving end August ethanol stocks comparable to those of last year’s 877 million gallons, 2017’s 887 million gallons and 2016’s 879 million gallons. Average implied ethanol off-take over the last four weeks fell to 6.448 mbpd, the lowest in six weeks, but still 11% better than last year and unchanged from 2019. U.S. gasoline demand was flat last week at 9.578 mbpd vs 9.572 mbpd the week prior, but was 9% higher than last year’s 8.786 mbpd and 1% higher than 2019’s 9.471 mbpd. Over teh last four weeks, U.S. gasoline demand has averaged 7.0% above last year and, but 2.6% below 2019.
