Ethanol rose the most in more than a week as corn jumped because of bad weather.
Futures advanced for a third day to the highest price since March 16 on concern that hot, dry weather in the Midwest may hurt corn crops, limiting supply and raising the cost of producing the biofuel.
Denatured ethanol for July delivery advanced 6.2 cents, or 2.7 percent, to $2.354 a gallon on the Chicago Board of Trade. Futures have gained 6.9 percent this year.
A U.S. Agriculture Department report yesterday showed 48 percent of the corn crop was in good or excellent condition as of July 1, the worst for that date since 1988 and down from 72 percent on June 3.
That pushed ethanol higher, as did speculation that poor margins may lead producers to idle more output, SCB & Associates LLC, a Chicago-based brokerage, wrote in a note to clients today.
Valero Energy Corp. (VLO:US), the third-biggest maker of the additive, has temporarily halted production at two distilleries, citing adverse market conditions.
In cash market trading, ethanol in New York advanced 9.5 cents, or 4.1 percent, to $2.405 a gallon and in Chicago the additive gained 9.5 cents, or 4.3 percent, to $2.315, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf increased 8.5 cents, or 3.7 percent, to $2.38 a gallon and on the West Coast the biofuel rose 3.5 cents, or 1.5 percent, to $2.44.
Corn for December delivery gained 18.75 cents, or 2.9 percent, to $6.745 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
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