EIA Report on Ethanol
- Ethanol production in the week ended April 24 was 537,000 barrels/day vs 563,000 the previous week and 48% below last year.
- On an annualized corn grind rate, weekly production translated to 2.820 billion bushels.
- The last USDA estimate in April for the 2019/20 crop year saw 5.050 billion bushels of corn used for ethanol.
- Ethanol stocks were 1.106 billion gallons, down from the record high 1.163 billion gallons last week.
- This was the lowest level since April 3, and the second largest weekly stock decline in history.
FBN’s Take On What It Means: Ethanol production has dropped nearly 50% since mid March. Implied usage has started to recover (see Chart of the Day below). Ethanol production for the rest of this marketing year hinges on continued recovery of the economy. However, the damage has been done and even with a modest increase in demand, the USDA will still need to lower their usage figure further.
China’s Soybean Crush Picking Up
- Cofeed estimated weekly Chinese crush as of April 24 at just under 1.7 million tonnes vs 1.6 million the week prior, and equal to last year.
- The agency expects crush will continue to slowly increase over the next few weeks to 1.8 million tonnes per week.
- April crush is projected at 6.7 million tonnes vs 6.6 million in March and 7.1 million last year.
- Total soybean crush for 2019/20 crop year to to date is at 46 million tonnes, which is down 1.3 million tonnes from last year.
FBN’s Take On What It Means: China’s soybean crush has been slow to increase. Shipments are now beginning to arrive, and port stocks are starting to increase. Bean stocks are expected to rise further as larger supplies arrive from Brazil in May through August. Imports from the US will not likely increase until these South American supplies are depleted.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
