Margins for ethanol producers may improve as corn prices decline this year on higher supply.
“Corn will be lower six months from today, so we think there will be higher margins to be made from ethanol production,” John Skrinar, director of Chemoil Energy, said in an interview at the Bloomberg New Energy Finance Summit in New York. Chemoil is a unit of London-based Glencore International Plc, the world’s largest publicly-traded commodities supplier.
Corn, the largest crop in the U.S. by revenue, has fallen 14 percent from the 2013 high of $7.4125 a bushel on rising inventory estimates. Projections indicate that farmers will boost planting of corn this year by the most since 1936.
“There is so much incentive right now for the production of corn,” Skrinar said.