The decision of the US Environmental Protection Agency to reject a Texas petition seeking a waiver from the federal renewable fuels mandate wasn't a surprise, analysts said, and it failed to budge corn prices.

The decision, announced Thursday (August 7), was already factored into the market, traders and analysts said.

"It was widely known they would reject it," a trader said. "There's no big impact at all."

Corn prices have plunged since Texas Governor Rick Perry made the request about three months ago. Perry argued that the diversion of corn to ethanol production was driving up feed prices, threatening to damage the state's beef, chicken and dairy industries.

The drop in prices for corn and other agricultural commodities has taken pressure off government officials to take action in response to rising food costs, analysts said.

"I think it may have had a different reaction if corn was at $8, rather than road-tripping back to where prices were back in January," said Bill Nelson, grains analyst at Wachovia Securities.

The nearby September corn contract traded up 11 cents at $5.19 per bushel Thursday.

Approval of the waiver request could have had a bearish effect on prices. Some analysts said it would have been seen as sign of a major shift in the government's ethanol policy toward ethanol.

Nelson said ethanol is likely to remain a hot-button issue in the US presidential election this autumn.

Joel Karlin, an analyst with Western Milling, said the issue will likely be revisited, but change is unlikely, especially as long as corn supplies are adequate.

"Perry's complaints didn't resonate much with the D.C. crowd, and they're probably not going to," Karlin said.