US ethanol output falls to 1.01 million barrels a day, stocks hit 2026 low
U.S. ethanol production fell 2.0 percent in the week ending September 25, down to 1.01 million barrels a day, or 42.29 million gallons. The Renewable Fuels Association says that was the lowest weekly output since late January. Stocks fell too, dropping 3.3 percent to 23.9 million barrels, the lowest since the start of the year.
So both ends of the ledger tightened in the same week. Plants made less, and the barrels sitting in tanks drew down faster than usual for this point in the fall.
The production slip
Weekly output has not fallen off a cliff. It is still running 1.2 percent above the same week last year and 3.0 percent above the five-year average, so the industry is making more ethanol than it typically does in late September. The four-week average, which smooths out the week-to-week noise, slipped 2.4 percent to 1.06 million barrels a day. That annualizes to 16.26 billion gallons.
A single week at the lowest level since January is worth noting, but the trend line still sits above both last year and the five-year norm. One soft week is not a pattern yet.
The stock draw
Inventories are the number to keep an eye on. At 23.9 million barrels, stocks are the leanest since the year began, and the 3.3 percent weekly drop is a real move. Even so, there is cushion left: inventories are 4.8 percent above a year ago and 8.8 percent above the five-year average.
For blenders, that mix matters. Plenty of ethanol is still around relative to history, but the direction is down, and if production keeps easing while demand holds, the gap between those two closes. A tighter gap eventually shows up in the price a jobber pays.
Canada's review
Canada is reviewing its clean fuel policy, and the reason it lands here is that U.S. ethanol competition is driving the review. Canada is a meaningful export outlet for American ethanol. If Ottawa reworks the rules to favor domestic supply, that demand could soften for U.S. producers already watching stocks tighten at home. It is early, and a policy review is not a policy change. But it is one more pull on where U.S. barrels end up going.
What to watch
Next week's RFA number tells you whether the production dip was one week of maintenance and soft margins or the start of a slower run into winter. Watch whether stocks keep drawing at this pace or level off. And watch Canada's review for any signal on whether it could narrow the export door for U.S. ethanol.