Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Ethanol Futures Rise on Higher Costs for Drought-Damaged Corn

Aug. 20 (Bloomberg) -- Ethanol futures rose to the highest price in more than a week in Chicago on concern that the drought-damaged corn crop will raise costs and curtail output.

Prices gained on speculation U.S. farmers will harvest a smaller crop than the 10.779 billion bushels in an Agriculture Department forecast. One bushel of the grain distills into about 2.75 gallons of ethanol.

“It’s just keeping pace with corn,” said Mike Blackford, a consultant at INTL FCStone Group in Des Moines, Iowa. “In terms of production, we’re going to see some slowdown, especially in September.”

Denatured ethanol for September delivery rose 3.6 cents, or 1.4 percent, to settle at $2.626 a gallon on the Chicago Board of Trade, the highest price since Aug. 9. The futures have gained 19 percent this year.

In cash market trading, ethanol on the West Coast jumped 5 cents, or 1.8 percent, to $2.775 a gallon and in New York the additive climbed 3 cents, or 1.1 percent, to $2.66, according to data compiled by Bloomberg.

Ethanol in the U.S. Gulf added 2 cents, or 0.8 percent, to $2.65 a gallon and in Chicago the biofuel increased 1 cent, or 0.4 percent, to $2.575.

Companies routinely slow output in September to perform seasonal maintenance and as the harvest for the industry’s primary feedstock is under way, Blackford said.

Ethanol production fell 2.8 percent last September and 3.6 percent in September 2010, Energy Department data show.

Corn for December delivery rose 16.5 cents, or 2 percent, to $8.2375 a bushel in Chicago.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.