Oct. 13 (Bloomberg) -- Ethanol gained for the third time in four days as U.S. production and stockpiles declined, according to an Energy Department report.
The biofuel gained 0.5 percent as stockpiles slid 2.7 percent to 16.9 million barrels from 17.3 million the previous week, the second consecutive drop, government data show. Output fell 0.3 percent to 860,000 barrels a day in the week ended Oct. 7, the fourth decline in five weeks.
“You’ve seen demand start to get a little stronger,” Jason Ward, an analyst at Northstar Commodity Investments Inc. in Minneapolis, said in a telephone interview.
Denatured ethanol for November delivery gained 1.3 cents to settle at $2.64 a gallon on the Chicago Board of Trade.
Corn futures for December delivery fell 2.5 cents, or 0.4 percent, to $6.3825 a bushel on the Chicago Board of Trade. Corn, the primary ingredient in U.S.-made ethanol, is the nation’s largest crop, valued at $66.7 billion last year, according to USDA data. The grain has fallen 16 percent since the end of August.
“With the price drop in corn, the farmers harvesting this corn are not too excited about selling it,” Ward said. “The fact that the price has come down is great for ethanol plants, but not if the farmers don’t sell it. They’re kind of in a tug of war right now.”
In cash market trading, ethanol in New York was unchanged at $2.825 a gallon, and on the West Coast the biofuel declined 1.5 cents, or 0.5 percent, to $2.84, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf fell 2.5 cents, or 0.9 percent, to $2.625 a gallon, and in Chicago the additive declined 1 cent, or 0.4 percent, to $2.665, Bloomberg data show.
Gasoline for November delivery rose 0.88 cent to settle at $2.7575 a gallon in New York. The contract covers reformulated gasoline, which is made to be blended with ethanol before delivery to filling stations.
--With assistance from Jeff Wilson in Chicago. Editors: Charlotte Porter, Bill Banker
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