Historically, ethanol producers have relied on railroads to ship the biofuel, primarily because it's too corrosive for pipelines. Officials estimate it could be up to 15 cents per gallon cheaper to ship ethanol by pipeline than railways.
If the tests are successful, Orlando could be the first major market in the U.S. to receive ethanol from a pipeline.
As part of its August Crop Production report, the Agriculture Department estimated this week that one-third of this year's corn crop will be used for ethanol production. And if USDA is correct, this year's harvest will be one of the largest in history.
As the first survey-based report of the year USDA officials estimate the 2008 corn crop will be the second largest in history at 12.3 billion bushels. The number matches last week's prediction by Informa Economics and is only slightly above FC Stone's forecast of 12.2 billion bushels. If realized, the crop will be just 6 percent smaller than last year's record.
The numbers for wheat production have fluctuated only slightly over the past three reports. USDA officials continue to project 2.46 billion bushels of wheat will be harvested in the 2008-2009 crop year, up 17 percent from last year.
Despite an acreage shift from beans to corn, soybean harvest estimates have varied only slightly since June. Last month, 3 billion bushels were expected to go into the bin, but USDA field surveys now put the number at 2.97 billion bushels. This is in line with FC Stone's forecast but below Informa's guess of just over 3 billion bushels.
Though U.S. production is expected to be up world ending stocks of corn and beans are anticipated to be tight one year from now. Taking the global picture in to account the bulls ran the bears out of Chicago as prices moved sharply higher in the days following release of the report.