Ethanol futures tumbled for a third day as the U.S. corn harvest accelerates and on ample supplies of the fuel from domestic output, stockpiles and imports.
Prices slipped to the lowest level in eight weeks as corn costs dropped and as ethanol output in the week ended Aug. 31, the most recent Energy Department data available, was at 829,000 barrels a day, up 4 percent from July 20, when production fell to the lowest in at least two years, and imports averaged 34,000 barrels a day, compared with none a year earlier.
“Production has been up,” said Will Babler, a broker at Atten Babler Risk Management LLC in Galena, Illinois. “Imports have been continuing to come in. You have a few things kind of pushing back against it.”
Denatured ethanol for October delivery dropped 2.1 cents, or 0.9 percent, to $2.455 a gallon on the Chicago Board of Trade, the lowest price since July 11. Futures have gained 11 percent this year.
In cash market trading, ethanol in the U.S. Gulf dropped 2 cents, or 0.8 percent, to $2.535 a gallon and on the West Coast the additive lost 2 cents, or 0.8 percent, to $2.60, data compiled by Bloomberg show.
Ethanol in Chicago slid 1 cent, or 0.4 percent, to $2.47 a gallon and in New York the biofuel increased 1.5 cents, or 0.6 percent, to $2.565.
Corn for December delivery decreased 5.5 cents, or 0.7 percent, to $7.7775 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
Gasoline for October delivery rose 1.95 cents, or 0.6 percent, to $3.0435 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, which is made to be blended with ethanol before delivery to filling stations.
The rise in gasoline stretches its premium to ethanol to 58.85 cents, the highest since June 15, from 54.8 cents yesterday, making the biofuel more attractive to blend as refiners stand to pocket the difference between the two fuels.
The value of Renewable Identification Numbers, known as RINs, climbed 2.6 percent to 2.98 cents, data compiled by Bloomberg show. They are credits that help the government track whether refiners are meeting 2012 federal ethanol use mandates.