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Ag economist says a corn rally possible

A University of Illinois ag economist says there could be significantly lower corn production this year, “I do see corn setting up for a possible rally. There’s a very bullish outlook currently. Monitoring the weekly (USDA) planting progress reports is going to be important in the next few weeks.”

Todd Hubbs says corn consumption continues to see support from ethanol, both production and exports. But, there are a few things that could slow that down, “China just introduced another 15% tariff on ethanol and they had a big jump in February exports that helped our totals. Brazilian exports will be stronger than expected under the tariff rate quota they implemented last September.”

In the first half of the marketing year, U.S. ethanol exports were nearly 7-percent higher than last year but Brazil’s were 7-percent lower. And, Hubbs says U.S. corn exports continue to strengthen and the dry weather in South America is having an effect on production in Argentina and likely Brazil.

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