Ethanol markets in Chicago and New York Harbor reached their highest levels of the year Tuesday on skyrocketing corn futures, sources said.
"Corn keeps taking off, and so is ethanol," one ethanol trader said.
July corn futures on the Chicago Board of Trade settled up 26.25 cents/bushel to $7.1875/bushel, as analysts said the strength was due to persistent heat and dryness in the Midwest -- the largest corn-producing region in the US-- and the Department of Agriculture's latest crop progress report, released late Monday, that showed only 48% of the current corn crop in a "good" or "excellent" condition.
That was down 8 percentage points from the previous week to the lowest level at this time of year since 1988.
The Chicago Argo ethanol assessment climbed for the third straight session as it went up 6.05 cents/gal from Monday to $2.3255/gal, the highest level since being assessed Deecember 7 at $2.3375/gal.
The Chicago Rule 11 ethanol assessment posted gains for the eighth session in a row as it jumped 4 cents/gal to $2.3250/gal, the highest level since December 9, when it was at $2.33/gal.
New York Harbor ethanol was also assessed up for the eight consecutive session as it climbed 6.05 cents/gal, mirroring the movement in the Chicago Argo market, to $2.4205/gal for any-July delivery. The assessment had not been this high since December 14, when it was at $2.43/gal.
During the Platts Market on Close assessment process Tuesday, Vitol bought 20,000 barrels of ethanol on an ITT Argo basis for July 8-18 delivery: 5,000 barrels from Center Oil at $2.3250/gal, 5,000 barrels from Hetco at $2.3275/gal, 5,000 barrels from Louis Dreyfus at $2.33/gal, and the remaining 5,000 barrels from Eco Energy at $2.3325/gal.
