In New York, Morgan Stanley expects corn use to be 130 million bushels higher than anticipated by the USDA because it feels the agency has under estimated demand for ethanol production. The bank says margins are currently at 14 cents per gallon, up from a loss of 20 cents per gallon last summer, and is expecting 50 cents per gallon margins for this summer. It says Brazilian ethanol is becoming increasingly uncompetitive against US ethanol, which will see the market continue to eat away at existing stocks and push US ethanol production back online.
More background on the story from the Digest
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