US weekly ethanol profits slip on pricey corn

NEW YORK, May 15 (Reuters) - Average weekly U.S. ethanol profits slipped as corn prices rose faster than prices for the alternative motor fuel, market players said.

"We've seen a rally in corn over the last week and a lot of it has to do with weather concerns," said Rick Kment, an renewable fuels expert at DTN in Nebraska. "We've seen a little bit of a bump in ethanol prices, but it is marginal relative to the higher corn prices."

Prices for corn, the top input cost for U.S. ethanol makers, have risen on poor weather, higher soy costs and big U.S. exports. May corn CK9 on the Chicago Board of Trade expired on Thursday at more than $4.21 a bushel, up about 25 cents from earlier in the month. The July contract CN9 was even pricier at more than $4.28 a bushel.

Meanwhile, spot ethanol prices <ETHANOL/US> in the Midwest rose about 7 cents to $1.73 per gallon, dealers said.

The ethanol crush spread fell about 2 cents to 23 cents a gallon, using the formula of the Midwest ethanol price, minus the corn price divided by 2.8.

Operating costs such as natural gas and overhead trim the crush spread for average alternative fuel producers by about 20 to 30 cents per gallon, depending on the distillery, bringing net margins between -7 cents to +7 cents a gallon.

Daily U.S. ethanol production rose nearly 3 percent in February, the latest month for which data was available, the Energy Information Administration, the statistics arm of the Department of Energy said this month. But much of that fuel went into spare inventories amid the soft demand. See [ID:nN30522626].

The dismal ethanol margins have deepened a series of production shutdowns, bankruptcy filings and curtailments as the hardest-hit distillers slow operations.

This week Pacific Ethanol Inc (PEIX.O), warned again it would need to file for bankruptcy protection if it could not soon restructure its debt. Click [ID:nLD642065]