Jan. 13 (Bloomberg) -- Ethanol fell to the lowest level in more than three weeks as corn sank below $6 a bushel amid ample supply of the biofuel.
Futures dropped for a second day after the Agriculture Department said corn inventories on Dec. 1 were 9.642 billion bushels, compared with 9.439 billion forecast by analysts surveyed by Bloomberg News. Ethanol output for the week ended Jan. 6 was 944,000 barrels a day, 6.3 percent higher than a year earlier, according to the Energy Department.
“It continues to come off with corn,” said Ian Jackson, a trader at SCB & Associates LLC in Chicago. “It’s the main ingredient in making ethanol and as the input falls people aren’t going to pay as much.”
Denatured ethanol for February delivery fell 3.3 cents, or 1.5 percent, to $2.121 a gallon on the Chicago Board of Trade, the lowest level since Dec. 19. Futures have slipped 9.7 percent in the past year.
Stockpiles rose to 18.8 million barrels last week, the most since July 29, the Energy Department said Jan. 11.
In cash market trading, ethanol on the West Coast dropped 7 cents, or 3.1 percent, to $2.205 a gallon and in Chicago the additive decreased 3 cents, or 1.4 percent, to $2.12, according to data compiled by Bloomberg.
Ethanol in New York lost 3 cents, or 1.3 percent, to $2.215 a gallon and in the U.S. Gulf the biofuel slipped 2.5 cents, or 1.1 percent, to $2.225.
Corn for March delivery dropped 12 cents, or 2 percent, to $5.995 a bushel in Chicago, the first time it’s fallen below $6 since Dec. 16. One bushel makes at least 2.75 gallons of ethanol.
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