Ethanol futures rose to the highest price in almost seven weeks in Chicago on concern that export demand for corn will raise production costs.
Futures gained for a fourth day as corn, the primary feedstock for U.S. ethanol, climbed on speculation China may increase imports. One bushel of corn makes at least 2.75 gallons of ethanol.
“Spot markets for corn continue to be tight,” said Jerrod Kitt, an analyst at Linn Group in Chicago. “That’s really what’s keeping things afloat.”
Denatured ethanol for March delivery advanced 0.3 cent to $2.239 a gallon on the Chicago Board of Trade, the highest level since Jan. 11. Prices are up 1.6 percent this year.
In cash market trading, ethanol in New York lost 1 cent to $2.27 a gallon and in the U.S. Gulf slipped 1 cent to $2.245, according to data compiled by Bloomberg.
Ethanol on the West Coast declined 1.5 cents to $2.29 a gallon and in Chicago the additive rose 0.5 cent to $2.185.
Corn futures for May delivery gained 4.5 cents, or 0.7 percent, to $6.485 a bushel in Chicago, the fourth straight gain.