Ethanol futures fell the most in more than a week on speculation that warm weather in the U.S. Midwest will improve corn planting and lower manufacturing costs for the fuel.
The gasoline additive slumped 0.9 percent a day after the Agriculture Department said about 69 percent of the U.S. corn crop was in good or excellent condition on June 12, up from 67 percent a week earlier. One bushel of corn distills into at least 2.75 gallons of ethanol.
“We saw ethanol fall off, but not as much as you would’ve thought with corn down,” said Jim Damask, a manager at BiofuelsConnect, a Heathrow, Florida-based alternative energy broker. “Apparently they think we have plenty of corn. Crude and gasoline were up, so that helped ethanol.”
Denatured ethanol for July delivery slipped 2.6 cents to $2.751 a gallon on the Chicago Board of Trade. Futures have gained 16 percent this year.
In cash market trading, ethanol in the U.S. Gulf dropped 8 cents, or 2.8 percent, to $2.775 a gallon and in New York the additive declined 4 cents, or 1.4 percent, to $2.84, according to data compiled by Bloomberg.
Ethanol on the West Coast slid 3.5 cents, or 1.2 percent, to $2.875 a gallon and in Chicago the biofuel lost 3 cents, or 1.1 percent, to $2.755.
Corn futures for December delivery dropped 19.5 cents, or 2.8 percent, to $6.85 a bushel in Chicago. Corn is the primary input for ethanol production in the U.S.
Crude for July delivery gained $2.07, or 2.1 percent, to settle at $99.37 a barrel on the New York Mercantile Exchange in the biggest one-day increase since May 18. Futures have climbed 32 percent in the past year.
Gasoline for July delivery gained 6.78 cents, or 2.3 percent, to $3.0646 a gallon on the Nymex, the highest settlement price since May 31.
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