Ethanol futures climbed from a five- month low in Chicago, paring a weekly decline that was the largest of 2012.
Prices increased as dry, hot weather in the corn-rich U.S. Midwest threatens crop development, driving corn futures up as much as 1.9 percent on the Chicago Board of Trade. The grain is used to make ethanol, with one bushel distilling into at least 2.75 gallons of the renewable fuel.
“Ethanol followed its feedstock up to regain some of the week’s losses as we head into the long Memorial Day weekend,” SCB & Associates in Chicago wrote in a note to clients.
Denatured ethanol for June delivery gained 1.1 cents, or 0.5 percent, to settle at $2.084 a gallon on the Chicago Board of Trade, rebounding from the lowest price since Dec. 15. The weekly decline was 6 percent. Futures have fallen 5.4 percent this year.
Corn futures for July delivery rose to $5.895 a bushel in intraday trading before closing unchanged at $5.785 on the CBOT. Corn for December delivery rose 1.3 percent to $5.215 a bushel.
In spot market trading, ethanol in New York slumped 6 cents, or 2.8 percent, to $2.10 a gallon and in Chicago the additive slipped 2.5 cents, or 1.2 percent, to $2.07, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf dropped 2.5 cents, or 1.2 percent, to $2.135 a gallon and on the West Coast the biofuel decreased 2.5 cents, or 1.1 percent, to $2.325.
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