Ethanol Slides to Six-Week Low on U.S. Budget, European Debt

Ethanol futures slid to a six-week low in Chicago on speculation that U.S. lawmakers will fail to agree on a plan to reduce the deficit and amid concern that Europe’s debt crisis will spread.

Futures followed crude oil and corn lower. A 12-member congressional debt-reduction committee is expected to announce that it can’t reach agreement on cutting at least $1.2 trillion. Germany’s finance minister said the country’s expansion has become “noticeably slower.”

“It was just a big off-day across the board, so it’s not surprising” that ethanol would fall,” said Justin Dirico, senior ethanol trader at SCB & Associates in Chicago.

Denatured ethanol for December delivery retreated 5.6 cents, or 2.2 percent, to $2.544 a gallon on the Chicago Board of Trade, the lowest price since Oct. 10. The futures have increased 7 percent this year.

Crude oil for January delivery fell 75 cents, or 0.8 percent, to $96.92 a barrel on the New York Mercantile Exchange, the lowest settlement since Nov. 9. The price ranged from $95.24 to $97.86. Futures are up 6.1 percent this year.

Corn for March delivery dropped 13 cents, or 2.1 percent, to $6.05 a bushel in Chicago. One bushel makes at least 2.75 gallons of the biofuel.

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 at dstets@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.