U.S. Ethanol Stocks Break 24M Mark for First Time in Over 7 Months
U.S. ethanol stocks rose by over 500,000 barrels to 24.15 million barrels for the week ending Jan. 3, hitting their highest level since May 2024. Production averaged 1.102 million barrels per day, down 9,000 barrels from the previous week. Corn futures fell ahead of the upcoming WASDE report, while Valero’s ethanol earnings are projected to decline.
Stocks of ethanol held in the U.S. rose by over 500,000 barrels, to 24.15 million barrels, for the week ended Jan. 3, the Energy Information Administration reported Wednesday.
The EIA reported stocks at their highest since May 2024, breaking the 24 million-barrels barrier for the first time since the week ended May 17. It also exceeds the high end of analyst estimates, with those analysts surveyed by Dow Jones this week forecasting the inventories between 23.6 million barrels and 24 million barrels.
Average daily U.S. production fell for the week, arriving close to the low-end of analyst forecasts and the lowest the average has been in over a month. Production averaged 1.102 million barrels a day, which is down 9,000 barrels a day from 1.111 million barrels a day reported last week.
Most-active corn futures trading on the CBOT are lower in morning trade, with the most-active contract down 0.4% as traders stay risk-off ahead of the Agriculture Department’s next WASDE report, expected at noon eastern time Friday.
In a research note, Mizuho Securities USA projected that Valero Energy would see lower earnings out of segments like ethanol. “In ethanol, margins narrowed with lower ethanol prices and higher corn costs, with capture being impacted by lower byproduct credit to boot,” said the firm. Valero will report its fourth-quarter earnings on Jan. 30.
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Source : Market Watch
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