Sep 23, 2014
Home | Tools| Events| Blogs| Discussions Sign UpLogin

Ethanol Drops to Three-Year Low After Corn Output Estimate

September 13, 2013

Larger corn crop is expected to lower costs for distillers, could lead to re-opening ethanol plants.

Mario Parker

Ethanol plummeted to a three-year low, expanding its discount to gasoline, after a government report showed corn production will be higher than previously estimated, lowering costs for distillers.

The spread widened by 8.55 cents to 91.47 cents a gallon after the Agriculture Department said corn output will be 13.84 billion bushels this year, more than the 13.6 billion estimated in a survey of 34 analysts and trading firms by Bloomberg.

"The cheaper corn should turn on some of these plants," said Jim Damask, a manager at StarFuels Inc. in Jupiter, Florida. "There’s a little more pressure on it after the report."

Denatured ethanol for October delivery slid 3.5 cents, or 1.9 percent, to $1.848 a gallon on the Chicago Board of Trade, the lowest level since Aug. 24, 2010. Futures have dropped 16 percent this year.

Gasoline for October delivery rose 5.05 cents, or 1.9 percent, to $2.7627 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.

Corn for December delivery fell 6.25 cents, or 1.3 percent, to $4.6625 a bushel in Chicago. September corn slumped 0.75 cent to $4.79. One bushel makes at least 2.75 gallons of ethanol.

Record Planting

Farmers responded to last summer’s drought that destroyed crops by planting a record amount of acres of the grain. Higher corn costs had forced ethanol plants to shut or reduce output.

Ethanol production in the week ended Sept. 6 rose 3.5 percent to 848,000 barrels a day, data from the U.S. Energy Information Administration show. That’s down 12 percent from the record 963,000 barrels a day in December 2011.

Stockpiles last week climbed 0.3 percent to 16.3 million barrels, the most since Aug. 16. Ethanol blender inputs, a measure of demand, tumbled 3.1 percent to 834,000 barrels a day, an eight-week low. Imports dropped 59 percent to 15,000 barrels a day last week.

Previous 1 2 Next

See Comments

RELATED TOPICS: Dairy, Ethanol



Market Data provided by
Enter Zip Code below to view live local results:
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by|Site Map|Privacy Policy|Terms & Conditions