By Sungwoo Park
Dec. 2 (Bloomberg) -- Corn fell for a second day after U.S. regulators postponed a decision to increase the use of ethanol in gasoline until mid-2010, clouding the demand prospects of the grain used to make the fuel additive.
The Environmental Protection Agency yesterday kept the blend at a maximum of 10 percent and said it may consider a higher ratio after engine studies are completed. Ethanol producers sought a rate of 15 percent. Higher blends will be needed for the U.S. to meet the so-called renewable fuels standard, the EPA said.
“The delay is disappointing, which has pressured corn yesterday,” said Han Sung Min, a manager at the international marketing division of Korea Exchange Bank Futures Co. in Seoul. “Still, the longer-term prospect for the grain is bullish since the U.S. will eventually expand ethanol use.”
Corn futures for March delivery fell as much as 4 cents, or 1 percent, to $4.105 a bushel in the electronic trading on the Chicago Board of Trade and traded at $4.13 3:59 p.m. Seoul time. Prices fell 0.7 percent yesterday after earlier reaching $4.2125, the highest level since Nov. 18.
The U.S. Energy Independence and Security Act of 2007 calls for the nation to use 12 billion gallons of renewable fuels such as ethanol next year, up from 10.5 billion in 2009. The law requires the U.S. to use 15 billion gallons by 2015.
Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, according to government data. Prices surged 14 percent in November, the biggest monthly gain since June, 2008, following delays in the U.S. harvest.
January soybeans fell as much as 0.6 percent and last traded little changed at $10.63 a bushel. The oilseed was barely changed yesterday after gaining 8.6 percent last month.
Wheat futures for March delivery declined as much as 3 cents, or 0.5 percent, to $5.81 a bushel and last traded up 0.2 percent at $5.85.
To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.
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