16 September 2009 21:34 [Source: ICIS news]
HOUSTON (ICIS news)--US fuel ethanol spot prices were assessed higher on Wednesday compared with a week earlier, lifted by tight supply, higher energy prices and a jump in feedstock corn prices, market sources said.
Spot ethanol in Chicago for prompt delivery was hovering at $1.70/gal (€0.31/litre), up by 10 cents/gal from a week ago, according to global chemical market intelligence service ICIS pricing.
An uptrend in Chicago was in place because ethanol was tight for prompt delivery, but market participants said the biofuel also got a boost from the latest rally in corn prices.
Corn futures moved up this week on forecasts that an early frost could damage part of what is projected to be the second-largest US crop on record.
Prompt corn traded as high as $3.47/bushel on 15 September, but frost fears had largely subsided on Wednesday and the front month gave back about a third of its gains, finishing the day at $3.36/bushel.
An ethanol producer downplayed the weather factor in the corn market, saying the rally earlier in the week was the result of renewed speculator appetite for commodities.
Natural gas prices soared by 33% in the past week on the back of what an analyst said were lower gas injection volumes reported by the Energy Information Administration (EIA) for the week ended 4 September.
The fuel is widely used to power US ethanol plants, accounting - along with corn - for the lion’s share of production costs at bio-refineries.Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels
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