US Ethanol Prices Ascent as the Domestic Corn Production Rises
- 14-Nov-2022 4:36 PM
- Journalist: Patricia Jose Perez
Texas- The price dynamics of Ethanol in the US continued to follow the uptrend momentum in November 2022 as the production rate of corn elevated in the third quarter of 2022 in the regional market. According to the data released by the US Ethanol Information Administrative, crop production, the essential upstream element required for Ethanol production, has increased in the US. Due to rising exports and strong domestic demand for Ethanol and animal feed, corn prices have risen, encouraging farmers to expand corn production. Farmers have often boosted the amount of maize grown by removing acres from less rewarding crops. The prices of Ethanol in the US market ranged between USD 940 to 1000 per MT, FOB Texas, in the second week of November 2022.
Central and Southern America became the major upstream element supplier, corn, and sugarcane for the domestic end-use manufacturing units. Compared with the previous year's production, a sharp increase in the crop yield is observed as the weather conditions improved this year in the regional market. The sugar mills have resumed the sugar production operation with the availability of upstream (corn). The mills that halted their Ethanol production due to the mill shutdown resumed their operation as the country faced food grain shortages during inflation. In the previous quarter of 2022, the US government tried to focus its production and consumption rate on sugar rather than Ethanol. With rising crude oil prices and depletion in Natural gas reserves in the domestic market, Ethanol production increased in the initial phase of Q4 of 2022.
Furthermore, the November report published by the World Agricultural Supply and Demand Estimate (WASDE), a part of the World Agricultural Outlook Board (WAOB), has led the US Department of Agriculture (USDA) to forecast slightly higher corn and soybean production toward the end of 2022. According to the organization, the current applications for corn include increased end-users, grown feed, and increased production in the regional market.
As per ChemAnalyst, the prices of Ethanol are anticipated to increase towards the end of November as the product demand from downstream, Ethanol-based fuel production, and from food services industries.