The estimated weekly production margin for a typical US Midwestern dry-mill ethanol plant dipped 4.5 cents, or 11.7%, to 34.04 cents/gal Friday as the increase in the average delivered feedstock corn cost was greater than that of the ethanol price.
The estimated margin was calculated using data from Platts and government agencies, including average delivered corn cost, dried distiller grain prices, natural gas prices, certain blending costs and ethanol prices.
Estimated fixed costs were based on a 50 million gallon/year capacity Midwestern plant with 32 employees at an average salary of $47,300/year.
The average estimated delivered feedstock corn cost jumped 13.81 cents/bushel to $8.2029/bushel, the second-highest level so far this year. The average estimated delivered feedstock corn cost reached a high for 2012 in the week ended August 10 when it was at $8.2293/bushel. The higher feedstock corn cost came as September corn futures hit an all-time high settlement Tuesday for the front-month contract at $8.3125/bushel.
The average estimated dried distiller grains byproduct credit edged up $1.41/st to $302.45/st, also the second-highest level in 2012 as the high was set the week ended August 10 at $3.0636/st.
The estimated denaturant cost rose 7.8 cents from the previous week to $2.1005/gal FOB pipeline, while the estimated natural gas cost was steady at $3.12/MMBtu. The denaturant cost was based on Friday's Platts assessment of Conway natural gasoline, which is the Kansas hub, while the natural gas cost was based on the August Platts Chicago ANR 7 pipeline monthly index.
The estimated ethanol price used in calculating the margin was the Platts Chicago Argo ethanol assessment Friday of $2.6030/gal, up 0.3 cents from a week ago as a well-supplied market limited upward movements in prices, sources said.
US weekly ethanol inventories grew 46,000 barrels to 18.493 million barrels in the reporting week ended August 17, the Energy Information Administration said Wednesday.
