Higher Corn Prices Color Ethanol Regulation

October 11, 2010 03:38 AM

Corn prices possibly headed to $6 could change the tone of pending ethanol regulation. EPA still needs to decide on E15-E10 blends. “They may split it up, with cars newer than 2007 that can handle E15; cars newer than 2001; and cars older than 2001,” conjectures Bill Biedermann of Allendale. “NO distributer is going to have three pumps for ethanol, so this will not be helpful.”

More generally, Congress will need to extend the blenders’ credit on ANY blend mandated or it will not be bullish,” he adds. “No one will blend at capacity without credit?especially at $6+ corn. It is hard to imagine anything but a complete extension, including any additional blend. But so far, our government has surprised me.”

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