Corn demand for ethanol production falls by 25M bushes from the month prior

In Washington, the lead economist for the National Corn Growers Association says that projected corn ethanol use for the 2022/23 marketing year declined by 25 million bushels from last month, according to this week’s UDSA World Agriculture Supply & Demand Estimates report. As the only change on the supply or demand side of the corn balance sheet, it resulted in a corresponding increase of 25 million bushels in projected corn ending stocks for the current marketing year.
Despite a return to the post-COVID normal in 2022, fuel ethanol produced using corn trailed the years leading up to the 2020 COVID disruptions. From 2017 to 2019, the average annual fuel ethanol production was 15.9 billion gallons, calculated using data from the U.S Energy Information Administration (EIA). After dropping to 13.9 billion gallons in 2020 and recovering to 15.0 billion gallons in 2021, production in 2022 was 15.4 billion gallons. This is 88% of the 17.4 billion gallon per year total of U.S. ethanol production capacity.
The EIA Short-Term Energy Outlook, released last week, projects a 2023 fuel ethanol production of 15.2 billion gallons, a 1% decline from 2022. Though not a significant reduction from 2022, the sector is falling about 5% short of the pre-COVID production levels.
Among the factors that impact ethanol production are motor gas consumption and ethanol blend rate.