Ethanol futures fell the most in three weeks as lower corn prices reduced costs for distillers.
Futures dropped on speculation that a 13 percent gain in corn prices this month eroded demand for the grain. Ethanol is made from corn in the U.S. and producers have responded to the more expensive feedstock costs by tempering output 11 percent this year.
“They’re tracking each other,” said Will Babler, a broker at First Capitol Risk Management Inc. in Galena, Illinois. “You’re starting to have rationalization by end-users here. Everyone on the demand side has been squeezed pretty hard.”
Denatured ethanol for August delivery slipped 3.6 cents, or 1.4 percent, to $2.468 a gallon on the Chicago Board of Trade, the steepest decline since June 21. Prices have increased 12 percent this year.
In cash market trading, ethanol was unchanged in New York at $2.58 a gallon and in Chicago the additive dropped 2 cents, or 0.8 percent, to $2.46, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf sank 1.5 cents, or 0.6 percent, to $2.525 a gallon and on the West Coast the biofuel added 1 cent, or 0.4 percent, to $2.67.
Corn for December delivery slid 12.5 cents, or 1.7 percent, to $7.175 a bushel in Chicago.
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