U.S. Ethanol Demand Boosts Brazil Corn

U.S. ethanol demand expected to take some U.S. corn out of global market in coming years, leaving an opening for Brazil.

Although Brazil's corn producers reduced their corn plantings this year, two consulting firms predicted Friday that they would benefit from the U.S. demand for ethanol in coming years.

A rising demand for ethanol in the U.S., where it is mostly made from corn, should take some U.S. corn out of the global market, the firms say. Brazil produces ethanol from sugar cane.

From the 2006-07 crop, Brazil is expected to export about 3.7 million metric tons of corn. That number is down from more than 5 million tons in 2004-05 because of lower local commodity prices.

Corn is Brazil's second-largest crop, but the U.S. and China have far larger production totals. Weather permitting, Brazil's production is seen rising to 43.5 million tons, a 4.5% increase.

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