US ethanol production falls, stockpiles decline to five-month low

US ethanol production unexpectedly declined in the week ending May 5, while stocks fell to a five-month low, data published by the US Energy Information Administration (EIA) showed Wednesday.

Total ethanol production in the US decreased by 12,000 barrels per day (b/d) to 965,000 b/d in the reporting week.

The weekly gain was a surprise to analysts, whose estimates ranged from a 5,000-barrel to a 10,000-barrel week-on-week increase.

Total ethanol production in the Midwest – home to over 90% of total US ethanol production capacity – dropped by 10,000 b/d to 912,000 b/d, according to the EIA.

Over the week, full production equated to the consumption of 2.49 million mt of corn, down from 2.51 million mt a week earlier.

Ethanol stocks declined by 100,000 barrels to 23.3 million barrels in the period covered by the report, the lowest level since the week ending December 2.

The stock decrease was unexpected by analysts, who projected the week-on-week change to range from unchanged to a gain of 100,000 barrels.

Margins calculated through a model from Iowa State University showed that the estimated return over operating costs for the average Midwest-based plant declined by 9 c/gallon to $0.50/gallon in the week ending May 5.

Corn prices for the week meanwhile rose by 23 c/bu during the week to an average of $6.45/bu.

Finished ethanol prices were unchanged at $2.31/gallon.