In case you missed it yesterday, the Wall Street Journal (subscription required) has even more bad news for the U.S. corn-ethanol industry:

California’s decision to adopt new-vehicle fuel standards to reduce greenhouse-gas emissions will have little short-term impact on corn-ethanol demand, but in the long term it is seen hurting the biofuel.
The state’s Air Resources Board approved the measure by a 9-1 vote Thursday. The regulation will require a lower “carbon intensity” in fuels starting in 2011. It also includes land-use changes due to ethanol production in assessments of ethanol’s carbon intensity, a facet of the rule fiercely opposed by the ethanol industry. The change would mean that emissions stemming from crop production, including the destruction of forestland or pasture to make way for crops, would be added to ethanol’s carbon footprint. The decision is a long-term roadblock that indicates “less of a bright future for corn-based ethanol,” said Michael Swanson, agricultural economist with Wells Fargo. “We went from having endless ethanol growth to having: ‘hmm, what kind of future do we have there anyway?’” Mr. Swanson said. The ethanol market has broader economic concerns, analysts said. Chad Henderson, analyst for Prime Ag Consultants, said that corn traders see ethanol demand as more politically motivated than economically driven. He said he isn’t anti-ethanol or pro-ethanol, “but at some point down the road, you would think ethanol needs to stand on its own two feet economically.” Mr. Swanson said that main problems facing ethanol are weak demand and improved fuel efficiency, which could cause a cut in ethanol demand even as it increases market share. He said there is little bullish news emerging from the ethanol market for corn traders.