US Ethanol Supplies Reach Highest Point Since April 2023

The latest data from the U.S. Energy Information Administration (EIA) reveals a notable surge in the domestic ethanol supply, reaching a 38-week high of 24.371 million barrels. This significant increase of 792,000 barrels within a week and 571,000 barrels compared to the previous year can be attributed to a combination of factors, including diminished demand and an accelerated pace of production within the ethanol industry.

Ethanol production in the US has been robust, averaging 1.062 million barrels per day. This represents a week-on-week increase of 13,000 barrels and a substantial year-on-year surge of 119,000 barrels. The sustained high production levels highlight the industry's resilience, even in the face of evolving market conditions.

Simultaneously, the ethanol export sector has experienced a noteworthy upswing, with average daily exports reaching 157,000 barrels. This represents a considerable jump of 88,000 barrels compared to the preceding week. The increase in ethanol exports indicates a potential avenue for industry growth and international market engagement.

As the ethanol landscape continues to evolve, the United States Department of Agriculture (USDA) is poised to provide additional insights. The upcoming corn for ethanol use estimate, scheduled for release on Friday, January 12th at Noon Eastern/11 Central, will be a key focal point. This estimate will shed light on the anticipated trajectory of corn utilization within the ethanol production process, offering valuable guidance for industry stakeholders.

The surge in ethanol stocks can be partly attributed to a deceleration in demand. As economic conditions fluctuate and transportation patterns shift, the demand for ethanol, a key component in gasoline blending, has experienced a slowdown. This reduced demand is reflected in the declining net ethanol inputs purchased by refiners and blenders, reaching levels not seen since early January 2023.

The robust ethanol production levels, averaging 1.062 million barrels per day, underscore the resilience of the industry. Despite the challenges posed by shifting market dynamics, the ethanol sector has demonstrated its ability to maintain and even increase production levels. This sustained production contributes not only to domestic fuel supply but also positions the industry for potential export opportunities.

The surge in ethanol exports further emphasizes the industry's adaptability and potential for international market expansion. With average daily exports reaching 157,000 barrels, there is a clear indication of global demand for U.S. ethanol. This demand not only bolsters the economic prospects of the ethanol industry but also establishes it as a key player in the international energy market.

Looking ahead, the USDA's forthcoming corn for ethanol use estimate is anticipated to provide crucial insights into the future trajectory of the industry. Scheduled for release on Friday, January 12th, this estimate will offer valuable information on the expected utilization of corn in ethanol production. As corn serves as a primary feedstock for ethanol, this estimate will be closely scrutinized by industry stakeholders for indications of potential shifts in production dynamics.