Ethanol futures in Chicago rebounded from the lowest level in more than a week as corn and crude oil gained, signaling higher production costs and demand.
Futures followed the commodities higher after a Labor Department report showed payrolls increased by 227,000 in February, more than the 210,000 projected in a Bloomberg News survey. Corn, used to make ethanol in the U.S., gained on bets China will boost imports.
“Outside of that, there’s not too much to talk about,” said Terry Reilly, an analyst at Citigroup Global Markets Inc. “Behind the run-up in corn, ethanol also got a boost from crude oil.”
Denatured ethanol for April delivery climbed 2 cents, or 0.9 percent, to $2.266 a gallon on the Chicago Board of Trade. Prices have gained 2.9 percent this year and dropped 11 percent in the past year.
In cash market trading, ethanol in New York rose 2 cents, or 0.9 percent, to $2.31 a gallon and in Chicago the biofuel added 2 cents, or 0.9 percent, to $2.27, according to data compiled by Bloomberg.
Ethanol on the West Coast jumped 1 cent, or 0.4 percent, to $2.41 a gallon and in the U.S. Gulf the additive gained 0.5 cent to $2.31.
Corn futures for May delivery rose 9.5 cents, or 1.5 percent, to $6.45 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
Crude oil for April delivery climbed 82 cents, or 0.8 percent, to $107.40 a barrel on the New York Mercantile Exchange. Ethanol is part of U.S. energy plans to reduce dependence on the fossil fuel.
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