Ethanol Declines on Speculation Supply Outpacing Consumption

Bloomberg
By Mario Parker - Jan 14, 2011 4:50 PM CT

Ethanol futures declined in Chicago on concern that supply of the fuel is outstripping consumption.

The grain-based additive slipped two days after an Energy Department report showed stockpiles of ethanol swelled 1.4 percent to 17.1 million barrels last week, the highest level since Nov. 26, and output slipped 1.8 percent to 888,000 barrels a day. The biofuel is blended with gasoline to augment supply and meet government mandates.

"Ethanol’s a little bit weak," said Ronnie Virissimo, a trader at SCB & Associates LLC in Chicago. "Guys aren’t in a hurry to bid. There’s not a lot of places to take it and just about everybody that has it is looking for somewhere to put it."

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