Ethanol futures rose the most in two weeks in Chicago as corn jumped to a record, making the fuel more costly.
Futures rose a second day on speculation drought in the Midwest threatens corn yields. The grain is the primary feedstock used to make ethanol in the U.S., with one bushel distilling into at least 2.75 gallons of the biofuel.
“It’s following corn,” said Mark Anderle, a trader at Truman Arnold Cos. in Dallas. “Corn is up across the curve and so is ethanol.”
Denatured ethanol for August delivery climbed 5.8 cents, or 2.3 percent, to $2.613 a gallon on the Chicago Board of Trade, the highest settlement since July 23. It was the biggest one-day gain since July 16.
In spot market trading, ethanol in New York increased 3 cents to $2.64 a gallon, according to data compiled by Bloomberg. In the U.S. Gulf, the additive rose 3 cents to $2.62.
Ethanol on the West Coast jumped 3 cents to $2.76 a gallon and in Chicago the biofuel gained 1 cent to $2.54.
Corn for December delivery advanced 20.75 cents, or 2.6 percent, to settle at a record $8.14 a bushel in Chicago.