Ethanol futures rose to their highest price in more than five years in Chicago as hot weather in the corn-rich Midwest threatens to raise production costs.
The grain-based additive jumped 1.6 percent on concern that temperatures above 90 degrees Fahrenheit (32 Celsius) will slow ethanol production at distilleries and on speculation that the weather could hinder corn crop yields. Corn is the primary ingredient in the biofuel in the U.S.
“The weather is a big part of it,” said Dan Flynn, a trader at PFGBest in Chicago. “They’re looking at the weather and stress on the corn crop. You put all that in the bucket and that’s what’s fueling the market.”
Denatured ethanol for August delivery rose 4.7 cents to settle at $2.942 a gallon on the Chicago Board of Trade, the highest settlement since July 18, 2006. Futures are up 24 percent this year.
In cash market trading, ethanol was unchanged in the U.S. Gulf at $2.95 a gallon and in New York the additive plunged 8.5 cents, or 2.8 percent, to $2.98, according to data compiled by Bloomberg.
Ethanol on the West Coast dipped 4 cents, or 1.3 percent, to $3.05 a gallon and in Chicago the renewable fuel increased 2 cents, or 0.7 percent, to $2.995.
Corn futures for December delivery advanced 12.5 cents, or 1.9 percent, to settle at $6.855 a bushel on the Chicago Board of Trade. One bushel makes at least 2.75 gallons of ethanol.
0 comments:
Post a Comment