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Low ethanol demand will likely sway corn planting intentions

Economists say the recent weakening of ethanol demand will likely sway some farmers to plant less corn than they originally planned.

USDA chief economist Rob Johansson says their prospective planting report showed US farmers intend to plant more than 97 million acres of corn in 2020, but a lot has happened since farmers were surveyed nearly a month ago including a decline in travel due to COVID-19.

“That will diminish their demand for motor fuels and so as with gasoline demand, so does ethanol demand decline.”

University of Illinois ag economist Todd Hubbs says corn prices are being impacted by the idling and shutdown of ethanol plants.

“It has already impacted corn prices. And the kind of weakness you see in corn prices relative to say wheat and soybeans is reflective of that.”

The USDA reports about 40% of the US corn crop goes into ethanol production in a normal year.

Hubbs made his remarks during a farmdoc daily webinar Tuesday.

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