Saying the margins have improved for ethanol production, Valero Energy Corp. (NYSE: VLO) announced it has restarted production at its Linden, Indiana plant. It had been closed since last year as margins shrunk.
A drop in the price of corn is the main contributor to the improved margins, as the price has dropped to $7.26-1/4 a bushel, down 14 percent from an all-time high of $8.43-3/4 a bushel.
In February and March Valero has started three plants that had been idled. All ten of its U.S. ethanol plants are now producing. All the plants have the capacity to produce about 110 million gallons of ethanol on an annual basis.
With drought conditions expected to continue on into the summer, it'll be interesting to see if the resume of productions of the plants are premature or not.