USDA increased projected 2018/19 corn use for ethanol production to 5.650 billion bushels, up 25 million bushels from the August estimate and up 50 million bushels from 2017/18. This change did not come as a surprise, as ethanol production seems to beat its previous record every month.
After almost a year of no news, China recently reinstated its goal to blend ethanol with its gasoline supply, aiming toward fuel formulations of 10 percent ethanol. The policy is not expected to have immediate consequences for global corn markets, as China holds massive corn stocks; in 2017/18, China is estimated to hold 41 percent of global corn stocks. However, given the country’s immense car fleet, it is worth monitoring the progress of this policy, as China’s corn needs could increase in the future.
U.S. average daily ethanol production vs. use by blenders and refiners
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