Ethanol demand boosts corn prices

Escalating demand for bio-fuel seen a boon for farmers

WASHINGTON – Escalating demand for ethanol will push corn prices higher this year, the Agriculture Department said Friday.

The amount of corn used to make ethanol should increase by 34 percent over last year’s use to 2.15 billion bushels, the department said in its monthly crop report.

…For corn, demand from ethanol plants as well as from foreign countries improved the price forecast to $2.25 to $2.65 a bushel, compared with last year’s $1.95 to $2.05.

Demand has risen so sharply, the amount of corn in storage is expected to drop to half of last year’s levels, the department said. Farmers should harvest 10.55 billion bushels of corn, a 5 percent drop from last year.

AP