Ethanol & DDGS – Output Rises for First Time in Nine Weeks

According to the EIA Weekly Petroleum Status Report, ethanol production increased 61,000 barrels per day to a 598 million-barrel-per-day average during the week ending May 01, 2020. Production moved higher for the first time in nine weeks, rising 11 percent but is 43 percent below production levels at this time last year. DDGS output increased 5,800 metric tons daily for the week but is down 41,657 MT daily from a year ago.

Gasoline supply increased 14 percent to 6.7 million barrels per day but is 32 percent below 2019 supply for the same weekly period. Ethanol stocks moved lower for a second consecutive week, reaching their lowest level in six weeks.  Ethanol imports were absent during the week. The increase in ethanol production elevated corn demand by 904 thousand bushels per day. DDGS output moved in sync with ethanol production, rising 11 percent for the week.

Ethanol output is averaging 918,526 b/d over during 2020, down 17,807 barrels daily from last week’s average and 110,012 barrels below average 2019 weekly production.  The ethanol blend rate decreased to 9 percent. Average year to date gasoline demand is 52.3 million gallons per day below 2019 average demand.

Approximately 8.9 million bushels of corn were consumed daily in the production of ethanol and, as a co-product of production, 63,728 metric tons of livestock feed was produced daily. DDGS production accounted for 56,875 metric tons, with the balance comprised of 5,859 MT of corn gluten feed and 995 MT of corn gluten meal.

The estimated ethanol-processing margin improved during the week.  Revenue from ethanol and DDGS sales moved from $4.34 to $4.31 per bushel while the cost of corn decreased seven cents to $2.97 per bushel.  This allowed the margin to expand four cents to $0.75 per bushel.  The estimated margin is 20 percent over levels from year ago.