The newest supply demand report out from the US Department of Agriculture today increases estimates of corn for ethanol usage.

According to the report, “U.S. corn ending stocks for 2008/09 are projected 50 million bushels lower this month as higher ethanol use more than offsets a reduction in exports. Corn use for ethanol is projected 100 million bushels higher on indications of improving blender incentives and higher ethanol use. Blender margins have become increasingly favorable since late February as gasoline prices have risen relative to those for ethanol. A continuing recovery in weekly production of gasoline blends with ethanol is also supportive of ethanol demand as are the latest data on ethanol production, imports, and stocks which indicate record use in December.”