Ethanol futures plunged the most in 19 months in Chicago after a government report showed an unexpected increase in corn supply that would cut production costs for the biofuel. The grain-based gasoline additive fell 6.5 percent after the Agriculture Department said corn inventories remaining from last year’s harvest totaled 3.67 billion bushels as of June 1, 2011 compared with a forecast of 3.29 billion bushels by analysts in a Bloomberg News survey.
“Ethanol is overreacting to the corn,” said Jim Damask, a manager at BiofuelsConnect, a Heathrow, Florida-based alternative energy broker.
“It’s a bloodbath out here. It’s their main production cost.
”Denatured ethanol for July delivery fell 17.8 cents to settle at US$2.555 a gallon on the Chicago Board of Trade, the steepest decline since December 2009.
“Ethanol is overreacting to the corn,” said Jim Damask, a manager at BiofuelsConnect, a Heathrow, Florida-based alternative energy broker.
“It’s a bloodbath out here. It’s their main production cost.
”Denatured ethanol for July delivery fell 17.8 cents to settle at US$2.555 a gallon on the Chicago Board of Trade, the steepest decline since December 2009.
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