Ethanol futures posted the longest streak of gains in a year on anticipation that bad weather in South America will lead to higher production costs.
Futures increased an eighth day amid forecasts for dry weather and above-normal temperatures in Argentina that could curtail the nation’s corn crop and result in higher demand for U.S. supplies. Ethanol is made mostly from corn in the U.S.
“We’ve had a pretty good rally in corn recently and ethanol has gone with it,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago. “If you look at the charts they’re pretty much identical.”
Denatured ethanol for January delivery rose 0.8 cent, or 0.4 percent, to settle at $2.231 a gallon on the Chicago Board of Trade in the longest streak of increases since Dec. 29, 2010. It was the highest price since Dec. 5. Futures have fallen 6.2 percent this year, headed for the first yearly drop since 2008.
In cash market trading, ethanol in New York gained 1 cent, or 0.4 percent, to $2.335 a gallon and in the U.S. Gulf the additive increased 1 cent, or 0.4 percent, to $2.34, according to data compiled by Bloomberg.
Ethanol in Chicago added 1.5 cents, or 0.7 percent, to $2.275 a gallon and on the West Coast the biofuel rose 1 cent, or 0.4 percent, to $2.295.
Corn futures for March delivery climbed 9.25 cents, or 1.5 percent, to $6.425 a bushel on the CBOT.