Dec. 24 (Bloomberg) -- Ethanol’s discount to gasoline expanded as higher production rates helped refill stockpiles of the grain-based biofuel.
The spread, or price difference, widened 0.9 cent to 87.28 cents a gallon at 11:05 a.m. New York time. Output has been above 900,000 barrels a day since Oct. 25, spurring inventory gains for three consecutive weeks, the longest streak since July, Energy Information Administration data show.
"Where production rates are, you would expect to rebuild stockpiles at some point," said Matt Janney, a trader at Futures International LLC in Chicago.
Denatured ethanol for January delivery rose 2.6 cents, or 1.4 percent, to $1.943 a gallon on the Chicago Board of Trade. Prices have dropped 11 percent this year.
Gasoline for January delivery advanced 3.55 cents, or 1.3 percent, to $2.8158 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.
The EIA, the Energy Department’s statistical arm, is scheduled to release the latest ethanol production and supply data on Dec. 27 at 11 a.m. in Washington.
Ethanol is made from corn in the U.S. A record crop for the grain caused prices to plummet 38 percent this year and helped to reduce costs for biofuel producers.
Corn for March delivery gained 0.75 cent to $4.35 a bushel in Chicago. One bushel makes at least 2.75 gallons of the renewable fuel.
The corn crush spread, or the price difference between corn and ethanol, was 16 cents, up from 15 cents yesterday, data compiled by Bloomberg show.
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