Ethanol Strengthens Against Gasoline on Motor Fuel Fall

Ethanol’s discount to gasoline narrowed as the motor fuel slipped more than the biofuel.

 

Ethanol Strengthens Against Gasoline on Motor Fuel FallThe 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.

Bloomberg

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