Buy or Sell: Will ethanol rise on corn shortage, E15 push?

Reuters
By Joshua Schneyer
NEW YORK Fri Oct 15, 2010 1:50pm EDT

NEW YORK (Reuters) - The price of corn ethanol, the main renewable fuel mixed into gasoline in the United States, has surged 10 percent since last week, reaching a two-year high near $2.22 a gallon on Friday.

Corn futures also rose to two-year highs in the week since the U.S. Department of Agriculture (USDA) forecast a smaller-than-expected corn harvest and the tightest supplies in 15 years.

Also boosting share prices for U.S. ethanol makers, the Environmental Protection Agency on Wednesday approved lifting maximum ethanol content in gasoline to 15 percent from 10 percent, a measure known in the industry as E-15.

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