U.S. ethanol output falls to 10-month low

* Ethanol output falls 26,000 bpd to 857,000 bpd
* Stocks fall 464,000 to 20.29 mln bbls

By Michael Hirtzer
July 5 (Reuters) - U.S. ethanol production dropped to the
lowest level in 10 months as biofuel refineries idled or slowed
operations amid surging corn prices and poor profit margins,
government data released on Thursday showed.
Production of U.S. ethanol plunged 3 percent, or 26,000
barrels per day, to 857,000 bpd in the week ending June 29, the
Energy Information Administration said.
The ethanol grind was the slowest since September while
stocks of the fuel fell 464,000 barrels to 20.29 million
barrels.
Valero Energy Corp in June announced that it was
idling three plants in Iowa, Indiana and Nebraska with a total
capacity of 310 million gallons per year, while Nedak Ethanol
LLC temporarily shut down its 44 million-gallon-per-year ethanol
plant in Atkinson, Nebraska.
Profits have been squeezed at the plants by rising corn
prices and seasonally tight supplies corn, the main feedstock
used in ethanol production.
Corn futures have increased 35 percent since early
June at the Chicago Board of Trade as record-high heat and
severe drought conditions stress the developing crop.