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Factors to watch for ethanol demand


The USDA did not lower its corn for ethanol use estimate in the latest supply and demand report, when many analysts were expecting a decline.

Dale Durchholz, owner of Grain Cycles, tells Brownfield he’s watching one important indicator of demand, “The big number that people need to keep track of is finished motor gasoline supplied and it’s actually been a weak thing for quite some time and it really tells us if gasoline demand is soft, that means ethanol demand itself is soft.”
Durchholz thinks a saving grace for ethanol could be the increased availability of higher blends, “Offsetting that a little bit, I think probably is going to be the fact that we’re going to see more of these people with blender pumps and maybe see more of the 15% blend.”

The USDA’s next corn for ethanol use estimate is out February 9th.

Factors to watch for ethanol demand