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Ethanol climbed in Chicago as corn and gasoline advanced on speculation that demand will improve.
The biofuel gained on optimism that corn’s 5 percent decline this month will stoke global orders for the grain, the primary ingredient for making ethanol in the U.S. Gasoline, known as reformulated gasoline or RBOB, increased on speculation that consumption will jump as the summer driving season nears.
“You have the strength in corn and the strength in RBOB, and ethanol rallied with it,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago.
Denatured ethanol for May delivery advanced 1.6 cents, or 0.7 percent, to settle at $2.164 a gallon on the Chicago Board of Trade. Prices have dropped 1.8 percent this year.
In cash market trading, ethanol on the West Coast dropped 2 cents, or 0.9 percent, to $2.285 a gallon and in New York the additive lost 1.75 cents, or 0.8 percent, to $2.2425, according to data compiled by Bloomberg.
Ethanol in Chicago increased 0.5 cent to $2.135 a gallon and in the U.S. Gulf the biofuel dropped 1 cent to $2.20.
Gasoline for May delivery jumped 4.46 cents, or 1.4 percent, to $3.1873 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.
Corn for July delivery advanced 9.5 cents, or 1.6 percent, to $6.125 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
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