March 29 (Bloomberg) -- Ethanol futures fell to an eight-week low in Chicago on signs of cheaper production costs.
Prices sank for a fourth day and followed corn lower on speculation demand for the grain will slow, and before an Agriculture Department report on corn tomorrow. One bushel of the grain makes at least 2.75 gallons of ethanol.
“Corn and ethanol continued to be in full liquidation mode before the planting intentions report tomorrow,” SCB & Associates LLC in Chicago wrote in a note to clients.
Denatured ethanol for April delivery slumped 5.7 cents, or 2.6 percent, to $2.15 a gallon on the Chicago Board of Trade, the lowest price since Feb. 3. The futures have dropped 2.4 percent this year.
In cash market trading, ethanol in New York tumbled 7 cents, or 3 percent, to $2.25 a gallon and in Chicago the additive slipped 5.5 cents, or 2.5 percent, to $2.175, according to data compiled by Bloomberg.
Ethanol on the West Coast slid 5 cents, or 2.1 percent, to $2.325 a gallon and in the U.S. Gulf the biofuel fell 4 cents, or 1.7 percent, to $2.255.
Corn for May delivery sank 16.25 cents, or 2.6 percent, to $6.04 a bushel in Chicago.
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