Corn, which is one of the primary sources for ethanol production, surged after weather forecasts suggested that there will be a continuation of dry weather until the end of June, or early July, for the corn producing states of the mid west. An analyst in the agriculture sector recently suggested to Niigata Global that yields could be down, resulting in higher production costs for ethanol.
The assessment of the corn fields places only 63 percent of it in the good to excellent bracket, compared to 70 percent last year. Niigata Global commented on recent analysis carried out that seems to suggest that the corn yield could fall below the U.S Department of Agriculture’s projection of 166 bushels per acre. Expectations are suggesting that the yield could fall to within 150 and 160 bushels per acre.
It is estimated that around 32 percent of the corn crop in the U.S. is under stress, with 50 percent of subsoil being considered below normal.
Ethanol rose 4.5 percent, or 9.4 cents to $2.164 a gallon for a July delivery. Corn jumped 40 cents (7.2 percent), the exchange limit to $5.94 per bushel, which was the single largest jump in corn futures in two years.
Niigata Global allegedly spoke about recent data compiled about ethanol manufacturers and that according to the data ethanol manufacturers could be losing money on every gallon of ethanol produced.
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