Ethanol futures tumbled the most in more than a week after the U.S. government forecast an increase in global corn inventories, signaling lower costs of producing the fuel.
Prices sank after the Agriculture Department said in its World Agricultural Supply and Demand Estimates that global corn stockpiles on Oct. 1, 2013, will be 155.74 million metric tons, up 2.2 percent from the May forecast. Ethanol in the U.S. is derived from the grain.
“The WASDE report was actually bearish,” said Ian Jackson, a trader at SCB & Associates LLC in Chicago. “You’re feeling better, not great. Any day that you can gain back a couple of pennies is good.”
Denatured ethanol for July delivery slumped 2.5 cents, or 1.2 percent, to settle at $2.036 a gallon on the Chicago Board of Trade, the lowest price since June 5 and the steepest decline since June 1. Prices have fallen 7.6 percent this year.
In spot market trading ethanol was unchanged in New York and in the U.S. Gulf at $2.08 a gallon, in Chicago at $2.01 and on the West Coast at $2.17 a gallon, according to data compiled by Bloomberg.
Corn for July delivery sank 8 cents, or 1.4 percent, to $5.84 a bushel. One bushel makes at least 2.75 gallons of biofuel.
To contact the reporter on this story: Mario Parker in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com