Abengoa to Begin Output at Ethanol Mills During Fourth Quarter

Abengoa SA (ABG), a Spanish engineering company, said it will begin output at ethanol mills in Indiana and Illinois during the fourth quarter.

The company has plants nearing the end of construction in Mount Vernon, Indiana, and in Madison, Illinois, Christopher Standlee, a spokesman for Seville-based Abengoa said today in an interview. The Indiana mill will begin production about one month before the Illinois plant, he said.

Denatured ethanol for November delivery rose 1.1 cents, or 0.6 percent, to $1.835 a gallon at 10:49 a.m. on the Chicago Board of Trade. Futures have climbed 13 percent this year. The average spot price for the fuel in the Midwest was about $2.495 a gallon on Oct. 9, according to data compiled by Bloomberg.

Margins for the fuel have improved from earlier this year amid lower corn prices. An average ethanol mill in Iowa is earning 8 cents a gallon and a distillery in Illinois is pocketing 13 cents, according to Ag Trader Talk, an online grains information service in Clive, Iowa. On May 7, a plant in Iowa was losing 2 cents.

Standlee declined to comment on whether the improved profitability is a factor in opening the new plants. Poet LLC, based in Sioux Falls, South Dakota, is the largest U.S. ethanol producer.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net.

To contact the editor responsible for this story: Dan Stets in New York at dstets@bloomberg.net.

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