Aug. 31 (Bloomberg) -- Ethanol capped its first monthly decline since May as ample stockpiles and increased imports pressure prices.
Futures slumped for the seventh time in eight days after the U.S. Energy Department reported this week that stockpiles were unchanged last week at 18.5 million barrels and while production dropped 0.5 percent to 819,000 barrels a day. Imports averaged 22,000 barrels a day, up from none a year earlier.
“We were surprised that we were unchanged in stocks with production actually down,” said Ian Jackson, a trader at SCB & Associates LLC in Chicago.
Denatured ethanol for September delivery fell 3.4 cents, or 1.3 percent, to settle at $2.553 a gallon on the Chicago Board of Trade today, the lowest price since July 26. Futures dropped 2.9 percent this month and have gained 16 percent this year.
In cash market trading, ethanol was unchanged in the U.S. Gulf at $2.635 a gallon and on the West Coast at $2.725, data compiled by Bloomberg showed. Ethanol increased 1 cent, or 0.4 percent, to $2.665 a gallon in New York and fell 0.5 cent to $2.575 in Chicago.
Corn for December delivery sank 8.75 cents, or 1.1 percent, to $7.9975 a bushel in Chicago. The grain also had the first monthly drop since May. U.S. ethanol is made from corn.
Producers are losing 37 cents a gallon making ethanol from corn based on September contracts. A bushel yields about 2.75 gallons of ethanol.
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