Ethanol declined for the third time in four days in Chicago, falling with corn on expectations that rain helped crops in the U.S. and South America.
The biofuel dropped 0.5 percent as corn and soybeans slipped and World Weather Inc. called for more rain in crop-growing regions of South America. The U.S. Agriculture Department is expected to report tomorrow that the corn crop is 10.6 million bushels, down from the September estimate of 10.7 million. Corn is used to make ethanol in the U.S.
The report “is of particular importance because it’ll give traders a better grasp of just how big the corn and the bean crops are here in the U.S.,” said Jerrod Kitt, director of research at Linn Group in Chicago.
Denatured ethanol for November delivery dropped 1.1 cents, or 0.5 percent, to $2.397 a gallon on the Chicago Board of Trade. The price is up 8.8 percent this year.
In cash market trading, ethanol on the West Coast declined 1.5 cents to $2.56 a gallon, according to data compiled by Bloomberg. In the U.S. Gulf, the additive remained unchanged at $2.465. Ethanol in Chicago declined 1.5 cents to $2.39 a gallon. In New York, the biofuel gained 1.5 cents to $2.51.
Corn for December delivery fell 5.25 cents to $7.3675 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.