No big surprises, US ethanol came in close to last week’s level and slightly above the level needed to reach USDA forecast.

Keep in mind USDA did raise its US corn use for ethanol in last weeks report.

USDA is projecting that corn use for ethanol will be up 6.3%, currently ethanol production is running 10% above the year ago level.

Stocks of fuel ethanol did increase up to 25.821 million barrels, that was seen as lightly negative as our ethanol stocks are record large for mid-March.

Today’s ethanol production report was considered neutral, ethanol production was good but the increase in stocks was somewhat disappointing.

Ethanol production rebounded nicely form last week up to 1.028 million barrels per day and that’s above USDA needed level.

We need to be producing about 1.019 million barrels per day and this includes USDA’s 25-million-bushel increase.

With ethanol prices treading anywhere from 80-90 cents and occasionally a $1 per gallon below the gasoline price, we can expect ethanol production to remain strong if that relationship continues.

Stocks did decline to 24.993 million barrels, that’s still well above last year, but keep in mind as we get beyond covid our driving mileage and fuel consumed is expected to be similar to pre covid level.

That should allow for strong demand from ethanol and to keep stocks from building up too far.

We would not be surprised at all to see our ethanol stock decline seasonally now through middle of summer.

One of the items that leads us to believe that ethanol should remain strong is that ethanol swaps are trading around 2.36 per gallon while gasoline is trading well above $3 per gallon.

So, ethanol is about 70 cents below gasoline per gallon.

Ethanol production did decline to 997 thousand barrels per day, just slightly below the level needed to reach USDA current corn use estimate.