Ethanol use cuts into U.S. corn stockpiles

Before the next harvest, U.S. stockpiles of corn will be 9.4 percent smaller than estimated in January because of increased ethanol production, according to the government.Before the next harvest, U.S. stockpiles of corn will be 9.4 percent smaller than estimated in January because of increased ethanol production, according to the government.

On August 31, the surplus will be 675 million bushels, a steep drop from the 745 million bushels that were previously projected last month and less than 1.708 billion bushels from the year prior, the U.S. Department of Agriculture stated in a report Wednesday. In a Bloomberg News survey, the analysts polled said they expected 729 million bushels on average; corn prices have climbed 89 percent in the past year as demand outpaces supply.On August 31, the surplus will be 675 million bushels, a steep drop from the 745 million bushels that were previously projected last month and less than 1.708 billion bushels from the year prior, the U.S. Department of Agriculture stated in a report Wednesday. In a Bloomberg News survey, the analysts polled said they expected 729 million bushels on average; corn prices have climbed 89 percent in the past year as demand outpaces supply.

Dan Cekander, the director of grain research for Newedge USA, concluded in a report "the function of the market could be to trade higher to ration demand." Moreover, he affirmed the rally in prices would help to "encourage a large expansion in planted acreage."Dan Cekander, the director of grain research for Newedge USA, concluded in a report "the function of the market could be to trade higher to ration demand." Moreover, he affirmed the rally in prices would help to "encourage a large expansion in planted acreage."

Wednesday on the Chicago Board of Trade, corn futures for March delivery increased 3.6 percent, or 24.25 cents, to trade at $6.980 per bushel.Wednesday on the Chicago Board of Trade, corn futures for March delivery increased 3.6 percent, or 24.25 cents, to trade at $6.980 per bushel.

The USDA said that the ratio of U.S. corn inventories to usage will decline to 5 percent, a low not seen since the 1995-1996 marketing year; a record 4.95 billion bushels of corn will be used to make ethanol this year, up from the 4.568 billion the year prior.  The USDA said that the ratio of U.S. corn inventories to usage will decline to 5 percent, a low not seen since the 1995-1996 marketing year; a record 4.95 billion bushels of corn will be used to make ethanol this year, up from the 4.568 billion the year prior.