Bloomberg story on ethanol following corn higher. Imagine if people actually ate corn? Could be inflationary. Yep, great use of a staple crop.
(Bloomberg) -- Ethanol futures rose for the 13th straight day, reaching an eight-week high as more expensive corn signaled higher manufacturing costs for producers.
The biofuel followed corn higher on speculation that hot, dry weather in Argentina will harm crops. Corn is the primary ingredient used to produce ethanol in the U.S. One bushel distills into about 2.75 gallons of the gasoline additive.
“A lot of focus is on South American weather right now,” said Matt Janney, a trader at Citigroup Global Markets Inc. in Chicago. “If your input costs are going up, of course you want to get a higher price.”
Denatured ethanol for January delivery rose 1.3 cents, or 0.6 percent, to settle at $2.314 a gallon on the Chicago Board of Trade, the highest price since Nov. 9 and the longest streak of gains since Oct. 29, 2007. Futures have climbed 19 percent this year.
Corn futures for March delivery rose 1.25 cents, or 0.2 percent, to close at $6.1525 a bushel, the seventh straight gain. The commodity has gained 48 percent this year.
An average ethanol mill in Iowa is losing 4 cents on every gallon produced while an Illinois plant is earning a penny a gallon on a spot basis, according to Ag Trader Talk, an online grains information service in Clive, Iowa.
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