Market and product
Ethanol Slides on Speculation Producers Will Cut Output
Ethanol rose for the first time inseven days, boosted by gains in gasoline and corn futures.
The biofuel climbed as gasoline advanced on unplannedrefinery shutdowns and bets that central banks will boosteconomic stimulus measures to spur growth. Corn increased asdrought in the U.S. and Russia reduced global supplies.
“Corn is up and gasoline is up and that is probablyboosting ethanol,” said Andrew Lebow, a senior vice presidentat Jefferies Bache LLC in New York.
Denatured ethanol for August delivery rose 1.4 cents, or0.6 percent, to $2.555 a gallon on the Chicago Board of Trade,after falling 6.8 percent in six days of losses. Prices havedropped 6.2 percent since reaching a year-to-date high of $2.725on July 18.
Corn for December delivery rose 17 cents, or 2.2 percent,to $7.9325 a bushel in Chicago, up 57 percent since mid-June.One bushel makes at least 2.75 gallons of ethanol.
Gasoline for August delivery rose 7.4 cents, or 2.6percent, to settle at $2.8878 a gallon on the New York Mercantile Exchange, the highest level in a week.
At least 63.9 percent of the U.S. was in moderate to severedrought as of July 24, up from 63.5 percent the previous week,the U.S. Drought Monitor said yesterday. The InternationalGrains Council yesterday cut its forecast for Russian wheatproduction by 10 percent to 44 million metric tons.
In cash market trading, ethanol fell 2 cents to $2.61 agallon in New York and dropped 0.5 cent to $2.73 on the WestCoast. Prices rose 0.5 cent to $2.53 in Chicago and gained 0.5cent to $2.59 on the Gulf Coast.
