Ethanol Futures Rise Most This Month as Corn Costs Increase
Ethanol futures rose the most this month after corn costs increased for U.S. producers.
Prices gained 1.8 percent as dry, hot weather threatens South American corn, spurring demand for U.S.-grown supply. Corn is the basis of ethanol produced in the U.S., with one bushel making at least 2.75 gallons of the biofuel.
Denatured ethanol for January delivery advanced 3.7 cents to $2.112 a gallon on the Chicago Board of Trade. Prices are down 11 percent in 2011, heading for the first yearly decline since 2008.
In cash market trading, ethanol in Chicago lost 3 cents, or 1.4 percent, to $2.155 a gallon and in New York the additive decreased 2.5 cents, or 1.1 percent, to $2.255, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf declined 2 cents, or 0.9 percent, to $2.295 a gallon and on the West Coast the biofuel slid 2 cents, or 0.9 percent, to $2.275.
Corn for March delivery jumped 18 cents, or 3.1 percent, to $6.01 a bushel in Chicago.
Flynn said ethanol prices also increased as crude oil rose. The biofuel is part of U.S. plans to reduce consumption of the fossil fuel.
Crude oil for January delivery gained 35 cents to settle at $93.88 a barrel on the New York Mercantile Exchange. The January contract expires tomorrow. The more actively traded February futures rose 30 cents to $94.05.
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