The erosion in ethanol demand continues, with production during the week of Apr. 10 hitting a ten-year low, averaging just 570,000 barrels per day and down about 44 percent vs. last year. About half of U.S. ethanol plants have shut down, including Valero announcing it was suspending production at eight facilities.
With USDA already reducing ethanol corn demand by 375 million bushels in the April WASDE, how much further decline is to come? That will depend on how long the COVID-19 quarantine lasts. If ethanol production continues to run at a 570,000-bpd pace through the quarantine period, which is anywhere from two to four more weeks at this point, with a slow recovery over the next eight weeks, we could quickly see another 375 million bushels or more come off the corn utilization number.
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