Argo Ethanol at 3mos High amid Demand Recovery, Stock DN
WASHINGTON, D.C. (DTN) -- Ethanol prices across U.S. trade hubs extended
gains into Friday afternoon, lifting product value at the Argo terminal in
Chicago to the highest trade since early March, finding support from rallying
RBOB futures, and as blending demand gradually recovers and inventory is drawn
down to a better than five-month low at 22.5 million bbl.
U.S. ethanol demand continued higher for a fifth straight week through May
29, gaining 8,000 bpd to a ten-week high 720,000 bpd, although still 22% below
year ago. This increase coincided with gasoline demand jumping over 4% in the
most recent week to 7.549 million bpd, a 10-week high as well.
U.S. ethanol production has risen to 765,000 bpd in the week reviewed, up
from a historic low of 537,000 late-April, according to data from the Energy
Information Administration. Recent increases in blending demand have prompted
domestic producers to bring some capacity back on-line.
"It's not nearly what it was pre-COVID, but every week it is getting a
little better," said Jeanne McCaherty, CEO of Guardian Energy Management in an
interview to StarTribute. Guardian Energy, Minnesota's largest ethanol plant,
restarted production this week at three of its plants in southern Minnesota,
bringing back the Janesville plant with processing capacity of 149 million
gallons annually. The plant, which employs around 50 people, closed April 2.
About 20% of all U.S. ethanol plants remain idled Friday, down from 30% on
April 21, according to the Renewable Fuels Association, a trade group. Ethanol
production had been running over 1 million bpd before the economic lockdown
prompted by the spread of COVID-19.
Liubov Georges, 1.646.359.4088, firstname.lastname@example.org, www.dtn.com.
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