Sept. 19 (Bloomberg) -- Ethanol futures were steady in Chicago after a government report showed stockpiles climbed to the highest level in seven weeks and as rising corn prices signaled higher production costs.
Prices slipped after the Energy Department said inventories ballooned 2 percent to 19.3 million barrels, the largest gain since July 27. Production rose 2.2 percent to 834,000 barrels a day, the most since April 27.
“It has a very soft kind of feel to it,” said Jerrod Kitt, an analyst at Linn Group in Chicago. “The surprise was the rise in production and it flowed right into the stockpiles. That set the market on the defensive.”
Denatured ethanol for October delivery rose 0.2 cent to $2.282 a gallon on the Chicago Board of Trade. Futures have gained 3.6 percent this year.
In cash market trading, ethanol on the West Coast fell 1.5 cents to $2.39 a gallon, and the additive in New York lost 1.5 cents to $2.36, data compiled by Bloomberg shows.
Ethanol in Chicago decreased 1.5 cents to $2.28 a gallon and in the U.S. Gulf the biofuel slipped 2 cents to $2.34.
Corn for December delivery advanced 16.5 cents, or 2.2 percent, to $7.565 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
Crude oil for October delivery sank $3.31, or 3.5 percent, to $91.98 on the New York Mercantile Exchange. Prices have fallen 6.9 percent this year.
Gasoline for October delivery tumbled 7.04 cents, or 2.4 percent, to $2.8286 a gallon on the Nymex. 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 54.66 cents from 61.9 yesterday, making the biofuel less attractive to blend for refiners, which stand to pocket the difference between the two.
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