NASHVILLE, Tenn. (RFD NEWS) — Ethanol plants boosted output sharply in early February, but fuel demand and exports still point to a cautious outlook for corn demand and biofuel margins.
Data from the Energy Information Administration analyzed by the Renewable Fuels Association show ethanol production jumped 16.1 percent for the week ending February 6 to 1.11 million barrels per day — about 46.6 million gallons daily. That was 2.6 percent above last year and nearly 5 percent higher than the three-year average. However, the broader trend stayed softer as the four-week average slipped 1.9 percent to an annualized 16.5 billion gallons.
Inventories edged up to 25.2 million barrels, building in the East Coast and Rocky Mountain regions but drawing down elsewhere. Even with the weekly increase, stocks remained below both last year and recent averages.
Gasoline supplied — a proxy for fuel demand — improved modestly but stayed below year-ago levels, while refiner blending activity also lagged historical norms. Exports dropped sharply to a four-week low, limiting an important outlet for production.
Together, the data suggest plants can run hard week over week, but sustained demand growth has not yet followed.
Farm-Level Takeaway: Ethanol output is improving, but weak domestic demand and export headwinds temper optimism about corn demand.
Tony St. James, RFD NEWS Markets Specialist
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