Corn Trade Shrugs Off Ethanol Production Data

The grain market bears didn't even flinch at data released Wednesday showing ethanol production increased last week from the previous week.

Ethanol production rose by 29,000 barrels per day over the previous week in the week ending last Friday, according to the U.S. Energy Information Administration (EIA). That adds up to 41.08 million gallons of production each day last week, yielding a projected annual production rate just shy of 15 billion gallons, according to a report from the Renewable Fuels Associaion (RFA). At the same time, no ethanol imports were reported, though that's unchanged from the previous week.

Though ethanol as a percentage of the total gasoline demand picture rose to a five-week high (11.02%), the amount added to the overall gasoline complex isn't rising despite increasing gasoline demand as crude oil prices continue to fall.

"Gasoline demand for the week averaged 372.8 million gallons daily, up 11% from the same week last year," according to an RFA report. "Ethanol input by blenders/refiners continued to disappoint, coming in at 815,000 barrels/day."

Ethanol stocks relative to the 20-day supply for U.S. refiners and blenders has widened sharply since mid-December; around December 12, stocks were equal to the 20-day supply needed for these processors. As of the end of last week, ethanol stocks are about 4 million barrels above that 20-day supply mark, at just over 20 million compared to 16 million for refiner supply, according to EIA.

At midday, the corn market bears seem unfazed by the EIA ethanol data that, because of the demand implications to increased production, would normally be bullish. Midsession found the March corn futures contract 5 1/4 cents lower at $3.80 1/2 per bushel.

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