RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

US ethanol output falls at fastest pace on record

Twitter Linkedin eCard

US ethanol output fell at its fastest rate on record as the so-called "polar vortex" swept through the country, bringing record low temperatures to some areas and clogging up logistics.

US biofuel plants produced 868,000 barrels a day of ethanol last week - down 51,000 barrels a day on output the previous week, the biggest decline on records going back to 2010.

The slump reflected - rather than squeezed margins, the usual cause of production setbacks – the unusually cold weather which struck the US last week, bringing sub-zero temperatures to all states, and logistical hold-ups.

'Rail network ground to a halt'

"During the reported week, we had the polar vortex," said Jerrod Kitt, strategist for Linn Group, the Chicago-based broker.

"The vast majority of ethanol is moved by rail – there is no pipeline. The rail network ground to a halt."

With ethanol outflow stalled, and inventories building, ethanol plants were forced to cut back production to well below capacity levels.

'Very, very strong margins'

Production levels may be affected for the next couple of weeks as plants deplete their inventories, against a background of strong competition for railcars.

"This will take a little time to work though," Mr Kitt told Agrimoney.com.

The snarl-up has denied plants the chance to exploit some "very, very strong" ethanol production margins - underpinned by low corn prices, which remain in sight of three-year lows, at a time when ethanol prices have shown a gentle increase.

Mr Kitt estimated production margins at a, positive, $1.50-2.00 per bushel of corn.

"That is a lot of money. They have every incentive to run up production."

By Agrimoney.com

Twitter Linkedin eCard
Related Stories

Morning markets: Soybean futures nudge higher. How much further will the rally go?

After all, there is already a "large premium" in prices to account for Argentine weather worries, one commentator notes. Wheat futures reverse

Evening markets: Soybeans extend rally, as Argentina forecast 'continues to trend drier'

...while wheat futures get help from worries over US dryness, and talk of "blowing dust" in Texas. Corn can’t keep up the pace

Funds renew ag selling wave - leaving them open to 'precarious position' on soy

... and potentially leaving them vulnerable to short-covering drives in the likes of wheat, coffee and sugar too. Still, in cotton...

Brokers enter 2018 upbeat on ag market, lifting price hopes

The market is expected to perform far better this year than in 2017, FocusEconomics says, flagging price upgrades in a range of contracts - notably wool
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069