Jan. 10 (Bloomberg) -- Ethanol futures gained for a third day in Chicago amid higher production costs.
Prices rose to a five-week high on concern that corn costs will be higher if dry, hot weather hurts crops in South America and boosts demand for U.S. supplies. Corn has climbed 7.4 percent from a year ago.
“It hung in there, relative to corn,” said Chris Wilson, an analyst at First Capitol Risk Management in Galena, Illinois. “The rain everyone expected over the weekend wasn’t there, but the market priced it in yesterday. Today it is taking a break.”
Denatured ethanol for February delivery rose 0.5 cent to settle at $2.263 a gallon on the Chicago Board of Trade, the highest price since Dec. 5. Futures have fallen 1 percent in the past year.
In cash market trading, ethanol in New York increased 3.5 cents, or 1.5 percent, to $2.35 a gallon and on the West Coast the additive climbed 2 cents, or 0.9 percent, to $2.35, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf advanced 1 cent, or 0.4 percent, to $2.305 a gallon and in Chicago, the fuel gained 1 cent, or 0.5 percent, to $2.215.
Corn futures for March delivery settled at $6.52 a bushel. One bushel makes at least 2.75 gallons of ethanol.
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