Ethanol futures dropped along with corn to the lowest levels since 2010 amid high stockpiles of the biofuel.
Prices fell for the fourth time in six days as corn, the main feedstock used to make the fuel additive in the U.S., reached the lowest level since December 2010 in intraday trading. Crude oil fell 10 cents to $90.76.
“It’s mainly the corn market as to why ethanol’s down,” said Terry Reilly, an analyst at Citigroup Global Markets Inc. in Chicago. “Corn definitely has a bigger impact than the basically unchanged crude oil market.”
Denatured ethanol for June delivery fell 4.2 cents, or 2 percent, to $2.042 a gallon on the Chicago Board of Trade, the lowest settlement since Oct. 7, 2010.
Ethanol supply surged to 21.4 million barrels for the week ending May 18, the steepest gain since Jan. 27, according to the Energy Department.
Corn futures for July delivery fell 16 cents, or 2.8 percent, to close at $5.625 a bushel on the Chicago Board of Trade. It was the lowest settlement for a most-active corn contract since January 2011.
Corn is used to make ethanol, with one bushel distilling into at least 2.75 gallons of the renewable fuel.
In spot market trading, ethanol in New York held at $2.10 a gallon and in Chicago the additive decreased 3 cents, or 1.5 percent, to $2.04, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf dropped 3.5 cents, or 1.6 percent, to $2.10 a gallon and on the West Coast the biofuel decreased 5 cents, or 2.2 percent, to $2.275.
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