March 5 (Bloomberg) -- Ethanol futures climbed to a three-month high in Chicago as corn surged on speculation that export demand will increase.
Futures rose after Liu Yonghao, the chairman of New Hope Group Co., China’s top maker of livestock feed, said the country should reform its corn-import system by dropping shipping quotas or boosting the amount buyers are able to purchase. Corn is used to make ethanol in the U.S.
“Corn was stronger today and ethanol kind of went with it,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago. “I’m sure the ethanol guys need to be bidding up to get the corn.”
Denatured ethanol for March delivery advanced 2.9 cents, or 1.3 percent, to $2.289 a gallon on the Chicago Board of Trade, the highest price since Dec. 5. Futures have gained 3.9 percent this year. The March contract expired today.
In cash market trading, ethanol was unchanged in Chicago at $2.245 a gallon and in New York the additive rose 3 cents, or 1.3 percent, to $2.33 a gallon, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf gained 3 cents, or 1.3 percent, to $2.315 a gallon and on the West Coast the biofuel added 2 cents, or 0.9 percent, to $2.365.
Corn for May delivery rose 5.75 cents, or 0.9 percent, to $6.6075 a bushel in Chicago. One bushel distills into at least 2.75 gallons of ethanol.
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