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U.S.: Ethanol plants expected to cut output on poor margins, oversupply

U.S. ethanol plants are expected to sharply curtail production in the weeks ahead as steep Midwest corn prices and the U.S.-China trade war have led to weak margins and oversupply, industry sources said. Margins to produce ethanol in the Corn Belt – where most U.S. production takes place – have fallen to a four-year seasonal low, while ethanol inventories are at the highest seasonally since at least 2010. Production hit its highest seasonal level since 2010, the earliest data available.  Industry sources said this glut makes future cuts inevitable, particularly as corn prices are making production even more expensive. That could boost fuel prices, as U.S. law requires ethanol to be blended into gasoline.