Unleaded gasoline as I mentioned bounced 12-16 cents today, its still nowhere near the highs posted the week following the Russia invasion of Ukraine but it is up about 18 cents off of the low from last week.

Our stocks fell for the first time in 5 weeks, we dropped to 25.892, that’s still a large level of stocks. Typically, we see stocks declining in the February-May timeframe before stocks find some bottoming action in the May-July timeframe.

Given the fact that US ethanol is cheaper than Brazilian ethanol tells us that our exports of fuel ethanol could be good in April-May, and we would not be surprised to see our stocks of ethanol declining consistently as we move through the next 4-8 weeks.

This chart does show that we did slip lower to 1.003 million barrels per day, and we need 1.017 per day. So, we are slightly below the level needed to reach the USDA forecast.

But do keep in mind seasonally April and May are relatively slow, and we tend to see increase production in the June/July timeframe.

At this point we believe that ethanol production is on track to reach USDA total, we may be able to exceed it with some good production this summer.

Currently after 7 months of the marketing year, a little over half, we are up 9.8% on ethanol production versus the year ago. USDA is projecting that corn use will be up 6.4%.

Our chart that shows weekly ethanol production shows that its down slightly from last week at 1.036 million barrels per day.

But that’s still above the level needed that’s shown in the black line, so we are still on track to reach or exceed USDA’s current corn use estimate for the ethanol industry.  

Year to date we are up 10.1% above the year ago level for ethanol production, USDA is estimating that corn use for ethanol production will be up 6.3% this year.

So, as we mentioned we are still ahead of pace to reach USDA’s target or even exceed their target.

Stocks went up for the 4^th week in a row to 26.54 million barrels. That isn’t a record high, that was set last year, but a record high for late March.

So certainly, ethanol stocks rising to these levels is some what of a concern.

One item we want to mention is that US ethanol is now cheaper than Brazilian ethanol. That was not the case 6-8 weeks ago so therefore we do believe that will result in better US exports of ethanol in the next few months.

That could promote lower stocks as we move forward and it’s also a seasonal trend where ethanol stocks decline in the April-May timeframe.

US stocks of fuel ethanol increased again up to 26.149mb. That’s a record for this week, late march, but it’s not a record high which was set in April back in 2019-2020 when the corona virus started to impact fuel use globally.

It’s worth noting the larger than normal ethanol stock would allow for larger exports through Brazil given the fact that they reduced their import tax from ethanol from 10% to 0%.

The report shows production at 1.042mb per day, that’s the largest number going back to early February.

That 1.042 is also above the level that’s needed to reach USDA corn use estimate.

This week ethanol production at 1.042mb was 13% above the year ago level, which is shown in the red line, a year-to-date production is up 10.2% compared to USDA estimate that corn use for ethanol will be up only 6.3%.

So, we are above USDA target, and it does appear that we are on track to exceed USDA corn us estimate. That could contribute to lower stock over the next couple of months.  

Stocks did increase, so there is a little bit of a negative news that did have an impact on the markets today.

Ethanol stocks at 25.949 are not an all-time record, that was set back in the spring of 2020.

But we were the largest ethanol stocks on record for this time or mid-March.