U.S. Ethanol Production Flat
Ethanol production in the week ended April 23 was 945,000 barrels per day, up from 941,000 the previous week.
Production was up 76% compared to last year’s Covid reduced levels, but remains 10% below 2019.
The average annualized corn usage rate was steady at 4,940 million bushels for the 2020/21 crop year, compared to the USDA estimate of 4,975 million.
Ethanol stocks for the week were 829 million gallons, down from 859 million gallons previously.
Current stocks are still 277 million gallons (25.1%) below last year.
Weekly US gasoline demand declined slightly to a three week low of 8.877 million barrels per day from 9.104 million the week before.
FBN’s Take On What It Means: Stagnating ethanol production and steady demand has drawn stocks down to record low levels. If production rates don't increase, low inventories could be a problem as the summer driving season arrives. There is likely plenty of incentive for ethanol production to continue running strong due to sturdy demand and positive margins. We expect production should be enough to meet and potentially exceed the USDA's corn demand projection.
China Soy Crush Gains
Cofeed’s weekly Chinese crush for the week ended April 23 increased 10% to nearly 1.8 million tonnes.
The crush volume was up 12% from last year as hog feeding recovers from African Swine Fever outbreaks.
Capacity utilization was at 50.2% up from 46% in the previous week.
Stocks of soybeans in ports decreased 200,000 tonnes to 3.5 million compared to 2.4 million last year.
Meal stocks were nearly unchanged from the previous week at 649,000 tonnes versus 136,000 last year.
Total crush for April is now projected up almost 5% over last year at just over 7 million tonnes.
Crush for the 2020/21 crop year is up 4.8 million tonnes from last year at 50.9 mmt, compared to USDA crop year forecast up 4.5 million.
FBN’s Take On What It Means For The Farmer: China’s weekly crush has been recovering due to better bean supply, improving margins and better domestic meal demand, though the government has issued guidelines to reduce corn and soymeal in feed rations. Crush may slow a bit because of the May Day holiday, but seasonally increases afterward. We would look for China’s strong demand to continue to support imports of corn and soybeans.
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