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POET suspends corn buying at several locations

POET, the nation’s largest ethanol producer, says it is suspending corn buying “at a number of locations” because of weak ethanol demand.

In a statement provided to Brownfield, the company says it is also evaluating its production levels going forward in the face of falling gasoline usage.

“Experts project a 957 million gallon drop in ethanol demand from March to May, which equates to a 331 million-bushel loss in corn demand. Our focus is on ensuring that every POET facility remains well-positioned to support a strong and swift recovery in rural America,” the statement read.

INTL FCStone market analyst Arlan Suderman says it’s a tough situation for the ethanol and corn sectors.

“If you’re consuming less gasoline, you need less ethanol to blend with it,” Suderman says. “So that’s a direct hit on the ethanol industry, with ethanol plants pulling their bids last week for corn and an utter collapse of the corn basis market unlike anything I’ve seen.”

DTN reports that POET is scaling back corn buying at seven of its 27 plants across the country—three plants in Minnesota and two each in Iowa and South Dakota.