Ethanol Record Monthly Output

The most recent update for ethanol output showed a record daily pace of 375,000 barrels according to the Energy Information Administration production report of April 2nd.(The EIA provides official energy statistics from the U.S. government).

The monthly output also set a record of 488 million gallons for January 2007.  U.S. plant capacity utilization has been on a steady rise for the last three months.

The lack of new ethanol plants coming online in the last two months however is of concern.   Since February 1st there has been only a 50 million gallon plant starting in North Dakota.  If there is no significant rise in new plants  this Spring, the year's ethanol output will fall short of expectations by 50 million bus. of corn use for the 2006/2007 crop year.  However, a more intensive utilization of current plants or a jump in new plant startups could still happen as construction projects were held up by tough winter conditions in the Midwest.

USDA's report for 2007 planting intentions has exceeded expectations by announcing a 15% increase to 90.5 million acres.  This has lowered corn prices but most likely revitalized ethanol plant projects that were held back by fears of corn rising to $4.50-$5.00.  So there may well be additional ethanol demand for the 2008/09 crop year and a need for more corn output in the long run.  There are definately yield uncertainties for 2007/08.  the cool, wet soils of the Midwest this spring may delay plantings past the optimum for above-trend yields by May, keeping December in the volatile $3.60-$4.00 range.