Ethanol futures in Chicago fell to the lowest price in 12 weeks on concern the economy is slowing and will crimp demand for the biofuel.
Prices moved lower with other commodities, including corn, crude oil and gasoline, on speculation that Europe’s debt crisis and a sluggish global economy will curtail fuel consumption. The additive is mixed with gasoline to stretch supply and meet federal mandates.
“Everything’s down,” said Jeff DeReamer, an ethanol broker at ICAP Energy in Lexington, Kentucky. “It’s the entire macro global economy.”
Denatured ethanol for October delivery dropped 3.8 cents, or 1.6 percent, to $2.28 a gallon on the Chicago Board of Trade, the lowest price since June 29. Futures have gained 3.5 percent this year.
In cash market trading, ethanol on the West Coast tumbled 11 cents, or 4.4 percent, to $2.405 a gallon and in Chicago the additive slid 5 cents, or 2.1 percent, to $2.295, data compiled by Bloomberg showed.
Ethanol in the U.S. Gulf decreased 4.5 cents, or 1.9 percent, to $2.36 a gallon and in New York the biofuel lost 4 cents, or 1.7 percent, to $2.375.
Corn for December delivery slumped 8 cents, or 1.1 percent, to $7.40 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
Crude oil for October delivery fell $1.33, or 1.4 percent, to $95.29 on the New York Mercantile Exchange. Prices have fallen 3.6 percent this year.
Gasoline for October delivery declined 4.43 cents, or 1.5 percent, to $2.899 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.
Gasoline narrowed its premium to ethanol to 61.9 cents from 62.53 cents yesterday, making the biofuel less attractive to blend for refiners, who stand to pocket the difference between the two.