US weekly ethanol production boosted by higher w-o-w Midwest output

7 Dec 2022 | Alexandra Chapman

Weekly US ethanol production rose by 59,000 barrels per day in the week ending December 2, data published by the US Energy Information Administration showed on Wednesday.

Total ethanol production amounted to 1.08 million barrels per day (b/d) in the reporting week, the data showed, while analysts had polled for a week-on-week dip of 1,000 b/d.

The week-on-week rise came primarily on the back of higher output in the Midwest - home to the majority of the country's ethanol production capacity - where production rose above the million barrel mark for the first time since the week ending May 27.

According to the EIA, ethanol production in the Midwest rose by 52,000 b/d to 1.01 b/d in the week ending December 2.

Over the week, full production equated to the consumption of 2.77 million mt of corn, up from 2.62 million mt a week earlier.

Ethanol stockpiles continued to climb, advancing by 323,000 barrels week-on-week to 23.2 million barrels in the period covered by the report.

Prior to the release of the EIA data, analysts had polled for a week-on-week stockpile decline of 50,000 barrels.

Margins calculated through a model from Iowa State University showed that the estimated return over operating costs for the average Midwest-based plant rose by around $0.07/gallon in the week ending December 2 to $0.24/gallon.

Corn prices for the week rose by around 32 cents week-on-week to average $6.60/bu.

Finished ethanol prices edged down by approximately 2 cents week-on-week to $2.31/gallon.

Also in the reporting period, the US Environmental Protection Agency proposed its Renewable Volume Obligations (RVOs), which were released on December 1 after being delayed several times and called for an increased overall blending mandate of 20.82 billion gallons for 2023, 21.87 billion gallons for 2024 and 22.68 billion gallons for 2025.

Ethanol lobby Growth Energy called the EPA's decision to add a 250-million-gallon supplemental for volumes of conventional biofuels including corn-based ethanol to be set at 15 billion gallons or higher (specifically 15 billion in 2023 and 15.25 billion each in 2024 and 2025) "a long-overdue fix that began with 2022 volumes."