Ethanol exports set new U.S. records

Oct 11, 2024
By Farms.com

Record exports offset rising U.S. ethanol output

U.S. ethanol production has surged to record highs in recent months, yet ethanol stocks have declined, largely due to an increase in exports which have kept pace with the rising output. The robust export activity has been essential in maintaining balance within the U.S. ethanol market.

The U.S. leads the world in ethanol production, a status underscored by recent data showing the country exporting unprecedented volumes, particularly to markets such as Canada and the United Kingdom. These regions have become key players in the U.S. ethanol export strategy, driven by a global shift towards cleaner energy sources.

The record 1.75 billion gallons exported from September 2023 to August 2024 represent a milestone for U.S. ethanol producers and highlight the global market's increasing reliance on biofuels. This trend is expected to continue as more countries implement policies aimed at reducing carbon emissions through sustainable fuel sources.

Domestic demand for ethanol, while still recovering to pre-pandemic levels, remains a significant factor in the overall balance of U.S. ethanol production and use.

The strong export numbers have not only helped stabilize the market but have also bolstered the U.S. corn industry, which is heavily reliant on ethanol production.

The ethanol export boom is a testament to the sector's resilience and adaptability in the face of global challenges. It underscores the importance of ethanol in the international energy landscape and signals potential growth areas for U.S. agriculture and energy policy in the coming years.

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.