With estimated U.S. corn production at 13.6 billion bushels, producers have as much corn as they need to run full-bore, analysts for Bloomberg Intelligence wrote in a separate report.
American refineries already have more oil than they can use. Now they’re being overwhelmed by a flood of ethanol.
Ethanol mills during the first full week of January operated at the second-fastest pace on record, rolling out more than 1 million barrels per day and pushing inventories to an 11-month high, a government report showed. Gasoline demand, down 4.2 percent from a year earlier, isn’t robust enough to absorb that much of the corn-based additive.
Like drillers who have boosted efficiency in shale patches, Midwestern biofuel producers have been able to squeeze more of the additive from a kernel of corn.
“This million-barrel-per-day run rate is nuts,” said Marcus Ludtke, vice president of Commodity Marketing Co., a brokerage based in Albert Lea, Minnesota. “The attitude in the energy complex in general, driven by crude oil, is one of oversupply.”
Ethanol stockpiles rose 1.2 percent to 21.3 million barrels for the week ending Jan. 8, the highest level since Feb. 27, the Energy Information Administration said in the report.
The report also showed that oil supplies in Cushing, Oklahoma, the delivery point for West Texas Intermediate crude, climbed to an all-time high of 64 million barrels.
With estimated U.S. corn production at 13.6 billion bushels, producers such as Green Plains Inc. and San Antonio-based Valero Energy Corp. have as much corn as they need to run full bore, analysts for Bloomberg Intelligence wrote in a recent report.
(Source – http://www.farms.com/news/u-s-facing-glut-of-ethanol-102770.aspx)