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ethanol futures tumble
August 6th,2012
Ethanol futures fell in Chicago as rain and cooler weather in the U.S. Midwest provided some relief to drought-withered corn crops.
Ethanol tumbled after rain over the weekend improved the prospects for corn, the primary ingredient used to produce ethanol in the U.S. Distillers have responded to higher corn prices brought about by drought by cutting output by 16 percent to 809,000 barrels a day from a record 963,000 on Dec. 30.
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June 25th, 2012
Ethanol futures increased the most since March as corn used to make the fuel rose to the highest level since November.
The biofuel gained as the most-active December corn contract surged on forecasts that dry weather will continue to the end of June for most of the Midwest, reducing yields and raising the cost of ethanol production.
About 32 percent of the domestic corn crop is under stress, and temperatures will rise as the plants begin to pollinate, Chicago-based T-Storm Weather LLC said in a report. At least 50 percent of subsoil has been rated below normal since May 31, the forecaster said.
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June 12th, 2012
Ethanol futures tumbled the most in more than a week after the U.S. government forecast an increase in global corn inventories, signaling lower costs of producing the fuel.
Prices sank after the Agriculture Department said in its World Agricultural Supply and Demand Estimates that global corn stockpiles on Oct. 1, 2013, will be 155.74 million metric tons, up 2.2 percent from the May forecast. Ethanol in the U.S. is derived from the grain.
“The WASDE report was actually bearish,” said Ian Jackson, a trader at SCB & Associates LLC in Chicago. “You’re feeling better, not great. Any day that you can gain back a couple of pennies is good.”
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June 4th, 2012
Ethanol futures rebounded from the lowest level in 20 months on speculation that cheaper prices will spur demand.
Ethanol futures prices rose the most since May 16 after its two worst weeks this year, giving blenders an incentive to use more of the fuel. Ethanol in the U.S. is made from corn and mixed with gasoline to augment supply and meet federal mandates.
“Anytime you get a 1 in front of ethanol prices, it gets people to salivating and they want to get some,” said Jerrod Kitt, an analyst at Linn Group in Chicago. “Prices got pretty darn cheap. We finally got a print under $2, which started a relief rally.”
Denatured ethanol for June delivery climbed 3.5 cents, or 1.8 percent, to settle at $2.01 a gallon on the Chicago Board of Trade. Prices rebounded from $1.975 on June 1, the lowest price since Oct. 6, 2010. Futures have fallen 8.8 percent this year.
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May 23rd, 2012
Ethanol futures in Chicago rebounded from a one-week low as a heat wave threatens to damage the corn crop and raise production costs.
Ethanol futures prices jumped on concern that hot weather forecast to blanket the corn-rich U.S. Midwest Memorial Day holiday weekend will harm crops. The grain is the primary feedstock for ethanol production in the U.S.
“You have the weather and you have a tight supply of corn,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago. “With that, ethanol was higher.”
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