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(Deletes incorrect contract expiration date in story published Feb. 1.)
Feb. 1 (Bloomberg) -- Ethanol futures gained for a second day in Chicago on concern that production costs will increase because of higher export demand for corn.
Futures advanced as corn rose to a three-week high, adding to speculation that distilleries will have to compete with foreign buyers to secure supply of the grain, which is used to make ethanol in the U.S. One bushel of corn makes about 2.75 gallons of the biofuel.
“Corn’s been up and that’s helping to support it,” said Will Babler, a broker at First Capitol Risk Management in Galena, Illinois.
Denatured ethanol for February delivery increased 0.2 cent to $2.169 a gallon on the Chicago Board of Trade. Prices have fallen 1.5 percent this year.
In cash market trading, ethanol in Chicago added 2.5 cents, or 1.2 percent, to $2.18 a gallon. In the U.S. Gulf the additive climbed 2 cents, or 0.9 percent, to $2.265, according to data compiled by Bloomberg.
Ethanol on the West Coast gained 2 cents, or 0.9 percent, to $2.295 a gallon and in New York the biofuel rose 1.5 cents, or 0.7 percent, to $2.285.
Corn futures for March delivery advanced 3 cents, or 0.5 percent, to $6.42 a bushel in Chicago. The settlement was the highest since Jan. 11.
--With assistance from Jeff Wilson in Chicago. Editors: Richard Stubbe, Margot Habiby
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