Ethanol Shares Wobble

Shares of ethanol producers climbed Friday after a government report showed farmers will plant the largest corn crop in 60 years, but lost some gains as investors questioned if the crop will be large enough.

Farmers will plant 90.5 million acres of corn this year, the U.S. Department of Agriculture reported, up from 78.3 million last year and ahead of the department's 87 million acre estimate. Surging ethanol demand was one of the reasons for the increase.

Citigroup analyst David Driscoll said the new planting will drive corn prices lower to about $3 per bushel by the end of 2007 from the current $4. He maintained a "Buy" rating on Archer Daniels Midland, the largest U.S. ethanol producer, and said lower corn prices will make ethanol production more profitable.

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