Aug. 15 (Bloomberg) -- Ethanol’s discount to gasoline narrowed as the biofuel followed corn higher after the government reported an increase in the number of acres farmers weren’t able to plant.
The spread between the fuels trimmed 3.45 cents to 74.25 cents a gallon. Growers filed insurance claims on 3.411 million acres of corn they were unable to plant due to wet weather in May and June, up from 262,467 last year, USDA data show.
“Trading today is tied to the corn market,” said Jerrod Kitt, an analyst at Linn Group in Chicago. “The acreage data for corn was more than what the market was looking for.”
Denatured ethanol for September delivery gained 3.6 cents, or 0.1 percent, to settle at $2.242 a gallon on the Chicago Board of Trade. Futures are up 2.4 percent this year.
Gasoline for September delivery rose 0.15 cent to $2.9845 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.
Corn for September delivery rose 16.75 cents, or 3.6 percent, to $4.815 a bushel in Chicago. The more active December contract gained 17 cents to $4.7225.
The corn crush spread, or the difference between a gallon of ethanol and the corn needed to make it, was 49 cents, versus 51.6 cents yesterday.
Ethanol is also getting a boost as plants approach fall maintenance that may “eat into supplies,” Kitt said.
Nationwide stockpiles of ethanol fell 1.7 percent to 16.4 million barrels in the week ended Aug. 9, the lowest level since July 5, according to the U.S. Energy Information Administration.
Ethanol-blended gasoline made up 94 percent of the total U.S. gasoline pool last week, up from 90 percent the previous period, the EIA, the Energy Department’s statistical arm, said.
In cash market trading, ethanol increased 5 cents to $2.60 a gallon in New York, the largest regional gain. Prices climbed 3.5 cents to $2.56 on the West Coast, 4 cents to $2.45 on the Gulf Coast and 4.5 cents to $2.355 in Chicago.
The government uses tracking certificates, known as Renewable Identification Numbers, or RINs, to determine compliance with mandates to use the fuel.
Corn-based ethanol RINs rose 6 cents to 78 cents, while advanced RINs, which cover biodiesel and Brazilian sugarcane- based ethanol, added 6 cents to 85 cents, data compiled by Bloomberg show.
--With assistance from Mario Parker in Chicago. Editors: Richard Stubbe, Charlotte Porter