Abengoa SA, a Spanish engineering and renewable energy company, resumed output at its Madison, Illinois, ethanol mill, after temporarily idling the operation last month for maintenance and because of poor margins.
The company has completed maintenance items that will help improve performance at the 88 million-gallon-a-year plant, Christopher Standlee, a spokesman for Seville-based Abengoa, said in an e-mail today.
Standlee declined to say whether it’s profitable for the company to make the fuel. Abengoa decided to shutter the plant last month for the maintenance after the worst U.S. drought in 56 years decimated cornfields and raised the cost of producing the biofuel.
Denatured ethanol for November delivery dropped 2 cents, or 0.8 percent, to $2.375 a gallon at 11 a.m. local time on the Chicago Board of Trade. Prices have increased 7.8 percent this year.
Corn for December delivery fell 12.25 cents, or 1.6 percent, to $7.3875 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
Based on December contracts for ethanol and corn, plants are losing about 32 cents on each gallon of the biofuel produced, data compiled by Bloomberg shows. That doesn’t include profit from the sale of dried distillers’ grains, a byproduct of ethanol production that can be fed to livestock.
Ethanol production rose 3 percent to 825,000 barrels a day last week, the biggest weekly gain since April 27 and the highest level in six weeks, the Energy Department said in a report yesterday.
Stockpiles at 19.2 million barrels are 12 percent higher than a year earlier.
Poet LLC, in Sioux Falls, South Dakota, is the largest U.S. ethanol producer, followed by Archer Daniels Midland Co., in Decatur, Illinois, according to data from the Renewable Fuels Association in Washington, an industry trade group.