Farm Industry News Blog

Ethanol producer margins expected to increase

High ending stocks, the expected record-high corn crop of 14 billion bushels and lower overall demand for corn could result in significantly higher margins for ethanol producers over the next two quarters.

In more than 150 trading sessions this year, corn and ethanol market prices have moved in unison nearly 69 percent of the time, said Jordan Godwin, U.S. biofuels editor, Platts, in a webinar today entitled “Corn Projections and the Possible Impact on the Biofuels Industry.” High ending stocks for corn and the expected record-high crop of 14 billion bushels of corn this year, coupled with lower overall demand for corn, could drive soaring margins for ethanol producers in the last two quarters of this year, Godwin said. If ethanol continues to follow lower corn prices, and barring any unforeseen catastrophes, the ethanol industry could gain traction politically, he said.


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The Farm Industry News Blog features commentary from Willie Vogt, Daryl Bridenbaugh and Jeff Ryan.

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