Corn demand for ethanol may be 10 percent lower than the U.S. government estimates because declining oil prices are curbing demand for the biofuel while the U.S. may reduce its blend requirements, Capital Economics Ltd. said.
Corn prices may slide to $6.75 a bushel as demand declines, the London-based researcher said today in an e-mailed report. The grain rallied to a record $8.49 a bushel on the Chicago Board of Trade on Aug. 10 after severe drought spurred the U.S. Department of Agriculture to cut its outlook for domestic production. The USDA estimates that 4.5 billion bushels of corn will be used to make ethanol in the 2012-13 season.
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