Ethanol futures rose a fourth day in Chicago, capping their best week since December, on signs of both higher demand and more expensive production costs.
Futures increased as warm, dry weather in the corn-rich U.S. Midwest threatens to slow crop development, raising the price for the ethanol feedstock, and after a May 16 Energy Department report showed production of conventional gasoline blended with the biofuel climbed to a record 5.4 million barrels a day last week.
“It was a strong day,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago. “There’s a little more gasoline demand. Corn was pretty strong.”
Denatured ethanol for June delivery gained 3.6 cents, or 1.7 percent, to settle at $2.217 a gallon on the Chicago Board of Trade, the highest price since April 30. Futures advanced a fourth day, the longest such streak since Feb. 28 and capped the best week since Dec. 23. Ethanol has fallen 16 percent in the past year.
In spot market trading, ethanol in the U.S. Gulf added 5.5 cents, or 2.5 percent, to $2.24 a gallon and in Chicago the additive increased 3.5 cents, or 1.6 percent, to $2.175, according to data compiled by Bloomberg.
Ethanol on the West Coast gained 3 cents, or 1.3 percent, to $2.355 a gallon and in New York the biofuel jumped 3.5 cents, or 1.6 percent, to $2.235.
Corn futures for July delivery rose 1.7 percent to close at $6.355 a bushel in Chicago.
Gasoline for June delivery rose 1.13 cents, or 0.4 percent, to settle at $2.8895 a gallon on the New York Mercantile Exchange. Prices lost 3.7 percent this week.
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