Ethanol production returns back to light disappointment.

The first three quarters of corn for ethanol usage came to 4.066 billion bushels, +6.0% from last year. To meet USDA's current 5.450 billion whole-year goal this fourth quarter needs to run 1.384 billion, +3.3% from last year. Given the fact this year's production efficiency is lower than last year we estimate actual ethanol production only needs to run +2.0% from last year in this quarter. That is our goal for these weekly ethanol reports in Q4, +2.0%.

The first month of this last quarter, June, was disappointing with weekly ethanol production -0.9% to +0.5%. The first two weeks of July were okay at +2.1% and +3.4% respectively. Today's weekly report, covering the third week of July, showed 1.095 million barrels per day. This was +0.1% year/year. June was behind the needed pace. July could be seen as mixed. Allendale is currently at USDA's current estimate but recognizes we are running slightly behind.

Weekly gasoline usage showed a surprising one-week jump last week, +6.8% year/year. Since September usage has run -0.3% year/year.

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