Dow Jones: Ethanol Outlook Improves, But Seems Tenuous

Agriculture Online
3:12 PM, August 4, 2009
By Ian Berry
Of DOW JONES NEWSWIRES

CHICAGO (Dow Jones)--An uptick in ethanol production in recent months is
supportive to Chicago Board of Trade corn futures, but the improved prospects
could be short-lived.

Analysts said ethanol margins are currently the strongest they've been in
about a year. Last week, the federal Energy Information Administration reported
ethanol production climbed almost 8% in May to a record high of 20.752 million
barrels.

The report was a surprise and "confirms our suspicions that (U.S. Department
of Agriculture) 2008-09 corn demand forecasts have room for upward revision,"
JPMorgan analyst Lewis Hagedorn said in a report.

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