S&P Global Platts assessed the benchmark Argo ethanol market at a one-month high of $1.30025/gal Friday as seasonal turnarounds and rising corn provided modest support.
Early October typically brings seasonal maintenance to ethanol plants, reducing output and providing some support to prices. That support has been muted this year as inventories have remained high amid lackluster demand.
US ethanol production fell 21,000 b/d to average 1.015 million b/d in the week that ended September 28, according to Energy Information Administration data released Wednesday. Inventories, meanwhile, added 816,000 barrels to finish the week with 23.445 million barrels, the highest level since mid-March. The build was focused in the Midwest, where the majority of ethanol plants are located.
Turnarounds typically provide a chance for inventories to draw down, especially in the fall as gasoline demand reaches its annual low in winter.
Lower-than-expected blending demand and lagging exports have kept more product in storage.
Feedstock corn prices, however, have offset some of the bearish pressure as they have climbed over the past two weeks. The front-month CBOT corn futures contract settled 75 points higher on day at $3.6825/bushel Friday.
Rainy weather over the weekend delayed the corn harvest in some areas. Moisture during the harvest can also increase the risk of mold forming in recently harvested corn.
