Ethanol production in the U.S. has fallen enough to drain a stockpile glut of the biofuel, CME Group Inc. said.
Output has declined 15 percent to 819,000 barrels a day from a record 963,000 barrels on Dec. 30, Energy Department data show, and that’s been enough to help soak up the surplus, CME said in a report. Inventories have slipped 19 percent to 18.4 million barrels from a record on March 16.
“Production has dropped by enough to allow inventories to fall to more reasonable levels from the record high seen in March,” the owner of the Chicago Mercantile Exchange said.
The decline in production and stockpiles, combined with surging gasoline prices, has buoyed the market, CME said.
Denatured ethanol for September delivery rose 0.6 cent to $2.596 a gallon at 9:57 a.m. on the Chicago Board of Trade. Futures have gained 18 percent this year.
Based on September contracts for corn and ethanol, producers were losing 26.2 cents on every gallon as of last week, the exchange said.
Including dried distillers grains, a byproduct of ethanol production that can be fed to livestock, distillers stand to pocket about 11.9 cents a gallon, CME estimated.
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