Sept. 17 (Bloomberg) -- Ethanol fell to the lowest level since July as corn, the main ingredient used to produce the fuel additive, fell the most since May.
Futures slipped to the lowest level since July 2 as corn sank as much as 4.4 percent. Ethanol supplies rose to a six-week high in the week ended Sept. 7, Energy Department data show.
“Corn is off pretty hard and ethanol is tracking it pretty closely,” said Chris Wilson, an analyst at Atten Babler Risk Management LLC in Galena, Illinois. Crush margins are still under intense pressure with a return in production, he said.
Denatured ethanol for October delivery fell 8.8 cents, or 3.6 percent, the most since Jan. 12, to $2.344 a gallon at 1:31 p.m. on the Chicago Board of Trade.
In cash market trading, ethanol fell 7.5 cents to $2.415 a gallon in New York, 7 cents to $2.345 in Chicago, 8 cents to $2.405 in the U.S. Gulf and 5.5 cents to $2.515 on the West Coast, according to data compiled by Bloomberg.
Corn for December delivery fell 27.75 cents, or 3.6 percent, to $7.5425 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
Ethanol producers have wrestled with negative margins to manufacture the fuel in the face of higher corn costs as the worst U.S. drought in more than 50 years parched crops in the grain-rich Midwest.
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