Ethanol gained the most in a week in Chicago as crude oil and gasoline advanced after separate reports showed the U.S. job market is improving and manufacturing is growing.
The biofuel rose after China’s manufacturing increased a fourth straight month and an Institute for Supply Management report showed manufacturing in the U.S. expanded a 16th straight month through November. Separately, employment increased by 93,000 last month, the most since November 2007, according to ADP Employer Services.
“You had the jobs data, the Chinese PMI data,” said Dan Cekander, the director of grain research for Newedge USA LLC in Chicago. “All of those factors were positive today.”
Denatured ethanol for December delivery gained 1.8 cents, or 0.9 percent, to settle at $2.124 a gallon on the Chicago Board of Trade. Futures have gained 8.9 percent this year.
In cash market trading ethanol in Chicago declined 1.5 cents, or 0.7 percent, to $2.14 a gallon and the fuel was unchanged on the West Coast at $2.245, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf slipped 1 cent, or 0.4 percent, to $2.265 a gallon and in New York the biofuel lost 0.5 cent to $2.24.
Trailing Corn, Crude
The gain in futures lagged behind the advances in corn, crude oil and gasoline after the Energy Department reported stockpiles of the fuel climbed to a two-month high while production of conventional gasoline blended with ethanol tumbled to 4.52 million barrels a day, the lowest level since April 30.
Oil for January delivery surged $2.64, or 3.1 percent, to settle at $86.75 a barrel on the New York Mercantile Exchange.
Gasoline for January delivery jumped 11.36 cents, or 5.2 percent, to settle at $2.3004 a gallon on the Nymex. The contract covers reformulated gasoline, which is made to be blended with ethanol before delivery to filling stations.
Corn for March delivery soared 22.25 cents, or 4.1 percent, to $5.6625 a bushel in Chicago. One bushel of the grain distills into about 2.75 gallons of ethanol.
An average ethanol mill in Iowa is losing 2 cents on every gallon produced while an Illinois plant is earning 4 cents a gallon on a spot basis, according to Ag Trader Talk, an online grains information service in Clive, Iowa.