University of Illinois expects hard 2019/20 ethanol year

In Illinois, the University of Illinois says poor ethanol plant margins, plants idling production, and continued haggling over small refinery exemptions provide the background for ethanol production moving into the 2019-20 marketing year. Corn use for ethanol production during the 2019-20 marketing looks set to recover slightly from the weak levels seen during the 2018-19 marketing year.

Based on ethanol production estimates provided by the U.S. Energy Information Administration, U.S. fuel ethanol production during the 2018-19 corn marketing year totaled 15.572 billion gallons. At around 500 million gallons below the previous marketing year, ethanol production came in down 3.1 percent.

Exports sit on pace to total lower than last year’s 1.636 billion gallons. Ethanol stocks over the marketing year increased by 332 million gallons despite lower production. The final Grain Crushings and Co-Products Production report for the marketing year comes out on September 1.

Ethanol production and recent conversion ratios indicate that corn used for fuel ethanol production totaled approximately 5.366 billion bushels, down 4.3 percent from use during the previous year. Reported use of sorghum for fuel ethanol production during the 2018-19 corn marketing year totaled near 100 million bushels, compared to 60 million bushels during the previous year. Combined corn and sorghum use during the past year were 3.5 percent lower than reported use during the last year.

Ethanol production thus far in the 2018-19 marketing year sits 4.4 percent lower than last year over the same period. USDA’s current projection totals 5.45 billion bushels for the marketing year. Numerous factors look to influence corn use for ethanol production during the current marketing year.