Ethanol’s discount to gasoline narrowed as the motor fuel slipped more than the biofuel.
The spread narrowed 1.95 cents to 69.51 cents a gallon as gasoline declined on the completion of seasonal refinery maintenance. Ethanol declined in line with corn, which remained near $7 a bushel.
“Corn is still at a pretty high price,” said Will Babler, a broker at Atten Babler Risk Management LLC in Galena, Illinois. “And the market is going to remain tight.”
Denatured ethanol for April delivery declined 1.1 cents, or 0.5 percent, to $2.403 a gallon at 12:49 p.m. New York time on the Chicago Board of Trade. The March contract, which expires tomorrow, fell 1.1 cents, or 0.5 percent, to $2.395.
Gasoline for April delivery dropped 3.05 cents, or 1 percent, to $3.0981 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, which is made to be blended with ethanol.
Corn for May delivery slipped 9 cents, or 1.3 percent, to $6.995 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol. The March contract fell 5.75 cents to $7.185 a bushel.
The corn crush spread, representing gains or losses from turning a bushel of corn into ethanol, was 15 cents a gallon based on May contracts. The amount doesn’t include revenue from the sale of dried distillers’ grains, a byproduct of ethanol production, which can be fed to livestock.
In cash market trading, the biofuel rose 3.5 cents to $2.55 a gallon in New York, 2.5 cents to $2.42 in Chicago, 2.5 cents to $2.47 on the Gulf Coast, and 0.5 cent to $2.625 on the West Coast.
To contact the reporter on this story: Kenneth Christensen in New York at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org