-US ethanol production ticks lower in latest week
-US ethanol stocks tick higher in latest week
U.S. ethanol production, for the week ended 9/17/21, slipped to 926k barrels/day (272 million gallons/week) from 937k bpd (275 mil gal/week) the week prior, contrary to some ideas the recent positive production margin structure and historically low ethanol stocks levels may contribute to a bit of a bump in production rates for the week. However, the minor downtick left last week’s production being the third lowest of the last 26 weeks and reflected a minor 2.2% year-over-year increase from same-week production of 906k bpd (266 mil gal/week). Over the last five weeks, U.S. ethanol production has run exactly unchanged from year ago levels on average vs the roughly 3.8% average increase we estimate will be needed over the course of 2021/22 in order for the USDA’s 5.200 billion bushel corn for ethanol usage estimate to prove accurate. U.S. gasoline demand last week was stagnant at 8.896 million bpd vs 8.892 mbpd the week prior, but was 4.5% higher than last year’s same-week demand of 8.515 mbpd. In fact, over the last five weeks, U.S. gasoline demand has averaged 7.5% above year ago levels (three weeks +4.5%, 1 week +9%, 1 week +14.5%), leaving the unchanged year-over-year same-period ethanol production rate quite disappointing in comparison.
U.S. ethanol stocks, despite the dip in production, rose slightly to 845 million gallons (20.111 mil barrels) from 840 mil gal (20.010 mil barrels) the week prior, but leaving current stocks now only 5 million gallons (0.6%) above year ago stocks of 840 million gallons which were the lowest for mid-September since 2014. This week’s data also showed imports of 10.6 million gallons, the third week of the last five with some level of imports (7 of the last 14 weeks). Implied weekly ethanol “off-take” slipped to 6.381 mbpd from 6.939 mbpd the week prior, with the most-recent 4-week implied off-take running only 2.6% above year ago levels – again in contrast to the better gasoline demand levels of late.
