Thursday, July 12, 2012

Ethanol Production Drops to Two-Year Low

Ethanol production plummeted last week to 821,000 barrels a day, a decline of 4.2 percent in the United States. That the lowest ethanol production level since July 2010, according to an Energy Department report.

With corn prices surging towards $8 a bushel, over the next couple of months we could see ethanol demand plunge even more.

Because there is little hope of rain coming soon, the drought will continue to devastate the corn in the Midwest, with a drop of a little over 1 percent daily as to the quality rating of the crop.

On the Chicago Board of Trade denatured ethanol for August delivery fell 2.8 cents, or 1.1 percent, to $2.44 a gallon

For the cash market, U.S. Gulf ethanol was down to $2.47 a gallon in Chicago, a loss of 5.5 cents, or 2.2 percent. In Chicago it fell 5 cent to $2.41, a decline of 2 percent.

New York ethanol was down to $2.53, falling 5 cents or 1.9 percent. On the West Coast it fell to $2.63, down 4 cents or 1.5 percent.

Corn took a breather, with December delivery in Chicago declining to $7.0475 a bushel, sliding 12.75 cents, or 1.8 percent.