December 20, 2010
Europe's bioethanol firms change from wheat to corn
Several European bioethanol manufacturers have switched from wheat to cheaper corn to improve taming margins, a grains forecaster analyst said Friday (Dec 17).
"Currently maize (corn) is much cheaper than wheat and as maize has a much better ethanol yield than wheat it is more attractive," said Christophe Cogny, market analyst with Strategie Grains.
In its latest report, the French grains analysis company upped its prediction for EU corn usage in bioethanol due to favourable prices.
Cogny said refiners in the Netherlands, Spain, Germany and Austria that can use either grain have already switched to corn, a choice that may have boost acreage for the grain in the season ahead.
"If [the refiners] switch from one grain to another it has price implications and planting implications. And not only for biofuels, but exactly the same in the animal feed sector," said Cogny.
Both grains are used for animal feed.
Prices for both grains have surged this year as production estimates in key producers such as Russia, the US and China have been downgraded. But while wheat has held near its highest point since early 2008, corn remains a cheaper option for ethanol producers trying to keep down costs.
Second-class wheat delivered at Rouen, France, on a free-on-board basis was EUR241.45 (US$317.57) a tonne Friday (Dec 17), according to figures from the French farm agency FranceAgriMer. Atlantic free-on-board corn was EUR216.65/tonne.