WASHINGTON—Corn futures gained a significant boost from The U.S. Department of Agriculture’s (USDA) monthly supply and demand report that predicted total domestic demand for ethanol by makers of fuel, feed and food products will increase 9 percent to 11.1 billion bushels from last year.
Demand for corn to make the gasoline additive will jump 17 percent this year, the U.S. Department of Agriculture said yesterday. Before today, corn prices slipped 14 percent this year. In the week ended Jan. 29, production of ethanol blended with gasoline rose 15 percent from a year earlier, government data show.
“Ethanol is competitive” for blending with gasoline, said Jerrod Kitt, an analyst at the Linn Group in Chicago. “Producers have been locking in profit during the last week, with purchases of corn and hedge sales of ethanol.”
Corn futures for March delivery rose 3.25 cents, or 0.9 percent, to $3.6175 a bushel on the Chicago Board of Trade, capping the first three-day rally since Jan. 6. The price climbed 2.9 percent this week.
In 2010, ethanol processors will use 4.3 billion bushels of corn in the year ending Aug. 31, more than last month’s estimate of 4.2 billion and last year’s total of 3.68 billion, the USDA said. Total domestic demand by makers of fuel, feed and food products will increase 9 percent to 11.1 billion bushels from a year earlier, the agency said.
The corn surplus on Aug. 31 will be 1.719 billion bushels, less than the 1.764 billion forecast in January the USDA said.
A typical ethanol mill in Iowa is earning 22 cents gallon, and a distillery in Illinois is pocketing 31 cents, according to Ag Trader Talk, a grains-information service in Clive, Iowa. One bushel of corn produces about 2.75 gallons of ethanol.
Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, government data show.
source: businessweek
Subscribe to:
Post Comments (Atom)
0 comments
Post a Comment