May 21 (Bloomberg) -- Ethanol slipped for the first time in a week as corn declined on speculation that farmers will sell reserves of the grain.
Futures dropped on speculation the highest average U.S. cash price for corn in two months will prompt farmers to let go of inventories, easing production costs for the biofuel.
“Ethanol was just down a little bit today,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago. “Looking at cash corn, we’ll probably see some farmer selling.”
Denatured ethanol for June delivery fell 0.5 cent to settle at $2.212 a gallon on the Chicago Board of Trade, the first decline since May 14. Ethanol has fallen 17 percent in the past year.
In cash market trading, ethanol in New York increased 2 cents, or 0.9 percent, to $2.255 a gallon and in the U.S. Gulf the additive rose 2 cents, or 0.9 percent, to $2.26, according to data compiled by Bloomberg.
Ethanol in Chicago gained 1.5 cents, or 0.7 percent, to $2.19 a gallon and on the West Coast the biofuel slipped 0.5 cent to $2.35.
Corn for July delivery sank 2.5 cents, or 0.4 percent, to $6.33 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
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