Ethanol’s
discount to gasoline swelled to the widest in nine weeks on concern the fuel’s gain this year will attract Brazilian supply.
The
spread, or price difference, widened 2.12 cents to 40.03 cents a gallon a day
after raw-sugar futures dropped to the lowest price in almost three years.
While corn is mostly used to make ethanol in the U.S., the Brazilian variety is
derived from the sweetener.
Denatured
ethanol for July delivery rose 3 cents, or 1.2 percent,
to $2.461 a gallon on the Chicago Board of Trade. Prices have gained 12 percent this year.
Gasoline
for July delivery gained 5.12 cents, or 1.8 percent,
to $2.8613 a gallon on the New York Mercantile Exchange. The contract covers
reformulated gasoline, made to be blended with ethanol before delivery to
filling stations.
Ethanol
imports have averaged 17,000 barrels a day through June 7, an Energy
Information Administration report showed on 12 June, up from 6,000 during the
same period in 2012.
Anhydrous
fuel ethanol in Sao Paulo cost $2.33 a gallon last week, down from $2.65 in
April.
Ethanol
in Brazil’s Center-South, the main sugarcane growing
region, rose to 1.57 billion liters
(9.86 million barrels) in the second half of May from 1.29 billion a year
earlier, Sao Paulo-based industry group Unica said in
a June 11 report. Mills turned 58.2 percent of cane
into ethanol, up from 51.7 percent a year ago, it
said.
U.S.
ethanol production was little changed at 884,000 barrels a day in the week
ended June 7, down from 885,000 a year earlier and the record 963,000 in
December 2011, the Energy Department’s analytical arm said. Stockpiles tumbled
2.6 percent to 16 million barrels, the lowest level
in records begun in June 2010.
Corn
for July delivery fell 7.25 cents, or 1.1 percent, to
$6.435 a bushel in Chicago. The corn crush spread, or the cost difference
between ethanol and the corn needed to make it, was 12 cents a gallon, up from
6 cents on 12 June.