The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Ethanol production for the week worked its way higher by about 3.5 million gallons, moving from 797,000 to 809,000 barrels produced per day. We are still down about 9% compared to last year at this time. The good news is that ethanol "stocks" fell by more than 220,000 barrels this week and are now down more than 18% compared to the supplies we were sitting on last year at this time. In actual "days-of-use" ethanol stocks fell back from about 22 days down to 21 days. Moral of the story, supplies are definitely getting tighter and I suspect this trend will continue for several weeks. I also heard that many ethanol plants have reduced their nearby bids while at the same time improving their Jun-July bids. To many players in the trade this simply means they are felling more comfortable with the summer margins. Ethanol demand is stabilizing and may in-fact surprise us some to the upside. Some plants in the midwest are now reporting the highest profitability margins since late 2011.
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Van Trump Report
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