ethanol report and its importance for traders

8/12/2019 Ethanol Report and Its Importance for Traders

1/11

Ethanol Report and

Its Importance For

Traders


2/11

Weekly Report

For Production

http://www.eia.gov/petroleum/supply/weekly/pdf/table2.pdf

For Stocks

http://www.eia.gov/petroleum/supply/weekly/pdf/table4.pdf

Two main componentsProduction and Stocks

Latest report numbers- Production @ 925000 barrels Per day

Stocks 16990000 Barrels

US target for corn ethanol production as latest WASDE is 5050 million

Bushels (A Barrel = 42 US Gallons = 4.5 bushels approx.)

Ratio of conversion from 1 bushel of corn to1 gallon of ethanol : 2.8

Therefore the USDA Target in terms of gallons is 14.14 billion gallons or

336.66 million barrels of ethanol
http://www.eia.gov/petroleum/supply/weekly/pdf/table2.pdfhttp://www.eia.gov/petroleum/supply/weekly/pdf/table2.pdfhttp://www.eia.gov/petroleum/supply/weekly/pdf/table4.pdfhttp://www.eia.gov/petroleum/supply/weekly/pdf/table4.pdfhttp://www.eia.gov/petroleum/supply/weekly/pdf/table4.pdfhttp://www.eia.gov/petroleum/supply/weekly/pdf/table2.pdf


3/11

Ethanol Margins VS Production


4/11

Production Specifications


5/11

Stocks Of Ethanol


6/11

Data Release and their reactions

21 May 2014

Production : 925000 Barrels/day v/s 922000 Barrels/Day

Inventory: 16990000 Barrels v/s 17302000 Barrels/day

Immediate reaction: In spite of somewhat bullish number, market reaction

was negative


7/11

14 May 2013

Production: 922000 Barrels/Day Vs 894000 BPD last week

Inventory: 17302000 Barrels Vs 17140000 BPD last week

Market Reaction :

The report had a neutral to bearish undertone and the market didt react

accordingly.


8/11

7 May 2014

Production: 894000 Barrels/Day v/s 898000 Barrels/Day last week

Inventory : 17140000 Barrels Vs 17212000 Barrels/Day last week

Market Reaction:

The numbers were neutral to bullish and the market initial reaction was

also bullish


9/11

Seasonality and Its Achievability

As seen from Graph the production this time around is the highest as seen

in the recent years, while the healthier margins can be attributed for this

surge in production, another recent that would like to mention is the USDA

Target, which seems far distant as of now.

USDA Target : 5050 Million Bushels

Ratio of conversion from 1 bushel to galllon : 2.8

Therefore the USDA Target in terms of gallons is 14.14 billion gallons or

336.66 million barrels


10/11

Latest report numbers put production @ 925000 barrels a day making

average @ 899000 Barrels a Day

OR, Yearly = 328.135 million gallons . At this Pace they will be short by 8

million Barrels.

Crush margins have been good across the corn belt(above) and the

Illinois region. This might be the reason why the production has been

increasing of late, Also, the refiners are behind the USDA target that could

also be the driving force


11/11

Technicals

US Export Sales

The Export Sales released on Thursday were

New Crop : 62500

Old Crop : 507800

Crop Progress

73% corn has been planted, an increase of 14 percentage points since

last week.

A total of 34% US corn has emerged as well.

The numbers were supportive for corn.

ethanol report and its importance for traders

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