U.S. ethanol waiver would roil grains market: traders

Reuters
By Colin Packham
Tue Jul 31, 2012 10:23pm EDT

MELBOURNE (Reuters) - The U.S. government is unlikely to bow to pressure for a waiver on quotas requiring a proportion of corn is used to make ethanol before November, at the earliest, traders said, despite the expected slump in global corn production due to severe drought.

And any change in the Renewable Fuels Standard, requiring that over a third of the corn crop is made into fuel ethanol, could cause market chaos after dwindling corn stocks had already been priced in, traders at an Australian grains conference said.

The earliest the mandate might be removed would be after the U.S. elections in November, Peter Nessler, president of commodities trading firm FCStone LLC said.

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