US ethanol production climbs 2% to 1.112 million bpd as exports jump 26%: EIA

US fuel ethanol production rose more than 2% in the week ended August 21, and exports climbed 26%, according to EIA data released August 26. Output averaged 1.112 million barrels a day, up 23,000 barrels from 1.089 million the week before, and 42,000 barrels above the same week last year. Demand for the corn gallon is holding up going into the back half of the season.

The production number

The build was real but small. Stocks rose to 25.206 million barrels, up 85,000 from 25.121 million the prior week, and 2.657 million barrels above where they were a year ago. That is a comfortable cushion, not a glut. Producers ran harder and still moved enough product to keep inventories from ballooning, which is the balance a blender wants to see before the fall maintenance stretch.

The export line is what earns attention. A 26% jump in a single week says overseas buyers are taking US gallons, and every barrel that leaves the country is a barrel that is not sitting in a Midwest tank pressuring the domestic RIN. For a jobber, firmer export demand tends to support the D6 credit and keep blend economics honest into Q4.

Michigan's E15 and E85 credits

The Michigan House voted in favor of tax credits for E15 and E85. That is a state-level push to widen the higher-blend market, and it matters to operators in the region because retail spread, not federal policy, is what decides whether a c-store owner puts in a blender pump. If the credits clear the full statehouse, Michigan retailers could see the pump math on E15 improve. It still has to pass the Senate and get signed, so treat it as a bill, not a law.

Maersk and marine ethanol

Maersk is testing ethanol blends as a marine fuel. Shipping demand for ethanol is not something US producers have counted on, and if the sea trade opens up as a real outlet it adds a buyer that competes with the domestic gasoline pool for gallons. One test does not make a market. But it is worth tracking for anyone who sells into the export channel, because marine offtake would sit on top of the fuel demand already moving the export number.

What to watch

Next Wednesday's EIA weekly print will show whether the export surge holds or was a one-week shipment. Watch the D6 RIN for a reaction to the stronger export pull. And watch the Michigan Senate calendar for the E15 and E85 credits, since the bill has cleared only one chamber so far.