Ethanol futures climbed for a third day in Chicago, the longest streak of gains in three weeks, as dry, warm weather in the U.S. Midwest threatened to raise production costs.
Prices advanced on speculation that dry weather in the corn-abundant region will cut crop yields and make it more expensive for a distiller to convert the grain into ethanol.
“It’s still the corn market,” said Mike Blackford, a consultant with INTL FCStone in Des Moines, Iowa. Ethanol “continues to reluctantly follow corn higher.”
Denatured ethanol for July delivery rose 0.4 cents to settle at $2.077 a gallon on the Chicago Board of Trade, the highest level since May 25. Prices have fallen 5.7 percent this year.
In spot market trading, ethanol was unchanged in New York at $2.10 a gallon, in Chicago at $2.03 and in the U.S. Gulf at $2.095, according to data compiled by Bloomberg. Ethanol on the West Coast dropped 2 cents, or 0.9 percent, to $2.19 a gallon.
Corn for July delivery rose 4 cents, or 0.7 percent, to $5.98 a bushel in Chicago.