Market News

USDA increases ethanol usage number

Wayne Nelson, President of L&M Commodities, Inc. at New Market, Indiana says one of the biggest surprises in the May 12 USDA Supply and Demand update was the increasein ethanol usage.

“That’s one of the things that really draws down on the corn carryout,” said Nelson. “A lot of guys were figuring close to a 1.7 carryout for the end of this year and then down to that 1.145 carryout for next year, you’re getting close tothat number we like to stay above, that billion bushel carryout.”

Nelson says what made the increase in ethanol use surprising, was that it came at a time when there have been a number of ethanol plants that have been idled.

With this latestUSDA report, Nelson tells Brownfield it’s an opportunity for the trade to pop up new crop prices, and he says if those prices are popped really hard, a little put protection under these markets wouldn’t be a bad idea.