Ethanol’s discount to gasoline widened to the largest gap in three months as the cost of producing the biofuel eased.
Prices followed corn lower after a U.S. Agriculture Department report showed export inspections for the grain dropped 66 percent from a year earlier to 13.475 million bushels, easing demand for the ethanol feedstock.
“Obviously, it’s an ugly day in the grains complex,” said Jason Ward, an analyst at Northstar Commodity Investments LLC in Minneapolis.
Ethanol’s discount to the motor fuel expanded to 60.98 cents a gallon based on January contracts, the widest since Sept. 28. It was 52.26 cents Dec. 24 and 18.79 cents Dec. 6. The differential has averaged about 61 cents this year.
Denatured ethanol for January delivery fell 2.2 cents, or 1 percent, to settle at $2.206 a gallon on the Chicago Board of Trade. Futures have declined 8.4 percent this month and are little changed this year.
In cash market trading, ethanol in Chicago slipped 2.5 cents, or 1.1 percent, to $2.185 a gallon and in the U.S. Gulf the additive decreased 2.5 cents to $2.24, data compiled by Bloomberg show.
Ethanol on the West Coast declined 2 cents to $2.335 a gallon and in New York the biofuel lost 0.5 cent to $2.315.
Source: Mario Parker www.Bloomberg.com