Ethanol Demand Less Certain for Corn Markets

May 14, 2019 02:34 PM

Ted Seifried of Zaner Ag Hedge says this is the season for ethanol demand in the last few weeks we've seen a rebound in corn used for ethanol. He sat down with AgDay's Clinton Griffiths to discuss ethanol demand and its impact on corn markets. 

"Profit margins are still under a significant amount of pressure," says Seifried. "We've seen the USDA actually lowering their ethanol estimates and a lot of it has to do with what the EPA is doing."

He's referencing the increase in small refinery exemptions.

"[It] really puts a lot of pressure on RIN prices," says Seifried.  "RINs are cheap so it means [refiners] don't really have to blend as much ethanol."

Seifried says given those headwinds, he's worried that the USDA is being too optimistic about ethanol demand for next year.

"I look at ethanol for this marketing season at 5.5 billion bushels," says Seifried. "I think, when all is said and done, that's going to be too high."

Globally, demand is still a potential bright spot but current trade tensions are tempering the hope of increasing sales. 

"China is the big question mark," says Seifried. "If we're doing free trade with China ethanol should be a big part of that package and that would be really optimistic for us." 

Listen to Seifried's full comments in the video.

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Spell Check

Small town Indiana, IN
5/15/2019 11:17 PM

  Thank you representatives Cindy Axne - D and Adrian Smith - R along with the 33 other US House of representatives for the letter to STEALING ANDREW WHEELER THE DEALER ON THE ILLEGAL RIN WAIVERS AND THE DESTRUCTION OF OUR DOMESTIC ETHANOL MARKET ! The letter can be found at dtn ethanol blog , todd neeley dtn staff reporter ,,


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