Ethanol futures rose to the highest level in more than four week as corn and crude oil climbed.
Prices increased as corn, the primary input used to make the biofuel in the U.S., climbed on speculation demand for supply will gain as hot, dry weather threatens crops in South America. Separately, oil surged after an Iranian military official warned the U.S. against sending an aircraft carrier through the Strait of Hormuz.
“There’s crude oil up over $4,” said Terry Reilly, an analyst at Citigroup Global Markets Inc. in Chicago. “Ethanol was up. It was broad-based commodity buying.”
Denatured ethanol for January delivery rose 3.7 cents, or 1.7 percent, to settle at $2.24 a gallon on the Chicago Board of Trade, the highest price since Dec. 5. Futures have declined 5.1 percent in the past year.
In cash market trading, ethanol on the West Coast increased 12 cents, or 5.3 percent, to $2.405 a gallon and in New York the additive jumped 8.5 cents, or 3.7 percent, to $2.405, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf added 5 cents, or 2.2 percent, to $2.375 a gallon and in Chicago the biofuel declined 2 cents, or 0.9 percent, to $2.255.
Crude oil for February delivery rose $4.13, or 4.2 percent, to settle at $102.96 a barrel on the New York Mercantile Exchange, the highest level since May 10. Futures climbed 8.2 percent in 2011, the third consecutive annual increase.
Corn for March delivery added 12 cents, or 1.9 percent, to $6.585 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.