DCO Production Down Sharply from 2020 Levels

DCO Production Down Sharply from 2020 Levels

The market was quiet to close out the week with no spot trading reported today. The grain and veg oil markets looked like a double black diamond slope with big price drops seen up and down the board. Today’s action at the CME is likely to push buyers back on the sidelines to start next week.

Ethanol production was estimated by the EIA at 945,000 barrels last week, up marginally from the week prior. Production is still struggling to find the pre-pandemic levels with high corn prices keeping margins under pressure. Distillers corn oil (DCO) production was estimated at 8.97 million pounds per day, down 14 percent from year ago levels. The tight supply has helped to boost prices again this week, but with the downturn in soybean oil it’s likely that buyers are going to push back on prices.

Figure 1.

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