Ethanol Futures Decline to Two-Week Low on Record Stockpiles

Ethanol futures in Chicago declined to a two-week low in Chicago a day after the Energy Department reported record inventories of the fuel.

The gasoline additive slumped after stockpiles rose 2.3 percent to 20.5 million barrels last week. Ethanol is blended with gasoline to stretch supply and meet federal mandates.
“There’s definitely some pressure in the front-month,” said Jim Damask, a manager at Biofuelsconnect, a Heathrow, Florida-based alternative energy broker. “There’s too much in storage. A lot of tanks are full so people are selling the front months, May and June, aggressively.”
Denatured ethanol for May delivery fell 1.9 cents, or 0.7 percent, to $2.639 a gallon on the Chicago Board of Trade. Prices have risen 11 percent this year.
In cash market trading, ethanol in Chicago slumped 4.5 cents, or 1.7 percent, to $2.63 a gallon and in the U.S. Gulf the additive lost 3.5 cents, or 1.3 percent, to $2.775, according to data compiled by Bloomberg.
Ethanol on the West Coast dipped 3 cents, or 1.1 percent, to $2.795 a gallon and in New York the biofuel slid 2.5 cents, or 0.9 percent, to $2.75.
To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net.
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

http://www.bloomberg.com/news/2011-04-14/ethanol-futures-decline-to-two-week-low-on-record-stockpiles.html