Ethanol plummeted against gasoline on speculation that a government report today will show corn production higher than a year earlier, decreasing costs for distillers to make the biofuel from the grain.
The spread, or discount, expanded by 6.12 cents to 89.04 at 10:51 a.m. New York time. Corn production may climb to 13.6 billion bushels from 10.78 billion last year, according to a survey of 34 analysts and trading firms by Bloomberg News. The U.S. Department of Agriculture will release its forecasts, based on farmer and field surveys, at noon today in Washington.
“Prompt ethanol started this morning being offered aggressively,” said Jim Damask, a manager at StarFuels Inc. in Jupiter, Florida.
Denatured ethanol for October delivery slid 2.8 cents, or 1.5 percent, to $1.855 a gallon on the Chicago Board of Trade. Futures have dropped 15 percent this year.
Gasoline for October delivery rose 3.32 cents, or 1.2 percent, to $2.7454 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.
Corn for December delivery fell 4 cents, or 0.9 percent, to $4.685 a bushel in Chicago. September corn added 3.5 cents, or 0.7 percent, to $4.8325. One bushel makes at least 2.75 gallons of ethanol.
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