Ethanol futures declined in Chicago on speculation favorable weather in the corn-rich U.S. Midwest will boost crops and lower production costs.
Prices fell as the U.S. Agriculture Department said unusually warm March weather and April rains improved soil conditions. About 17 percent of the corn crop was planted as of April 15, up from 7 percent a week before and 5 percent a year ago, the USDA said. Corn is used to make ethanol in the U.S.
“There’s good planting weather,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago. “Things kind of sold off late.”
Denatured ethanol for May delivery declined 4.1 cents, or 1.9 percent, to settle at $2.156 a gallon on the Chicago Board of Trade, the biggest one-day drop and the lowest price since March 29. Futures have fallen 2.1 percent this year.
In cash market trading, ethanol on the West Coast plunged 4 cents, or 1.7 percent, to $2.29 a gallon and in the U.S. Gulf the additive sank 2 cents, or 0.9 percent, to $2.225, according to data compiled by Bloomberg.
Ethanol in Chicago decreased 1.5 cents, or 0.7 percent, to $2.17 a gallon and in New York the biofuel slipped 0.5 cent to $2.25.
Corn for May delivery tumbled 6.5 cents, or 1 percent, to $6.1675 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
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