U.S. ethanol stocks largest in 2 years on rising output

Source: By Reuters • Posted: Thursday, February 12, 2015

Feb 11 (Reuters) – Stockpiles of U.S. ethanol rose to the largest in more than two years as producers of the grain-based biofuel boosted output for the first time in three weeks, U.S. Energy Information Administration data showed on Wednesday.

Makers of the gasoline additive had reduced production from record levels as profit margins declined amid the large supplies. But ethanol makers still were grinding through a record-large U.S. corn crop, of which more than a third is used in biofuel production.

Ethanol stocks climbed 149,000 barrels to 21.14 million barrels in the week ending Feb. 6, the most since the week of June 15, 2012.

Average output was up 13,000 barrels per day to 961,000 bpd, rising after declining two weeks in a row. However, the output remained below the record production of 992,000 bpd seen in December, the EIA data showed.

U.S. grain handler and ethanol maker The Andersons Inc on Tuesday said profit margins in biofuel were well below margins seen last year, and were expected to average lower throughout 2015.

Ethanol futures at the Chicago Board of Trade were down 1 percent at $1.45 per gallon as of 9:49 a.m. CST (1549 GMT), tumbling to session lows after the release of the EIA figures.