Ethanol futures were little changed in Chicago as producers sought to benefit from higher margins by selling contracts after the fuel rose to an eight-week high.
Futures pared gains after reaching the highest level since September. The fuel, made from corn in the U.S., is blended with gasoline to stretch supply. Production of conventional gasoline blended with ethanol rose 1.3 percent to 5.22 million barrels a day last week, the highest level since Aug. 26.
“Spreads remain well bid but we did see some producers take advantage of the excellent margins to do some selling today, keeping a cap on the front that has run up so hard in recent days,” SCB & Associates LLC, a Chicago-based brokerage wrote in a note to clients today.
Denatured ethanol for November delivery rose 0.4 cent to $2.79 a gallon on the Chicago Board of Trade. It was the sixth straight gain, the longest winning streak since Aug. 17. The futures have increased 17 percent this year.
In cash market trading ethanol in the U.S. Gulf surged 20 cents, or 7.1 percent, to $3.005 a gallon and on the West Coast the biofuel increased 10.5 cents, or 3.4 percent, to $3.16, according to data compiled by Bloomberg.
Ethanol in Chicago increased 5 cents, or 1.8 percent, to $2.86 a gallon and in New York the additive rose 2 cents, or 0.7 percent, to $3.08.
To contact the reporter on this story: Mario Parker in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com