Oil report

UPDATE 1-US ethanol prices extend rally on Midwest flood

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NEW YORK, June 16 (Reuters) - U.S. Midwest spot ethanol prices extended a steep climb on Monday, jumping about 10 cents as corn prices soared due to flooding in the Corn Belt, dealers said.

Prices for corn, which is the primary feedstock in the United States for the biofuel, have hit record highs over the last week as torrential rains in the Midwest displaced thousands of people and submerged millions of acres.

“Ethanol prices are jumping like crazy... It’s hard to find offers,” said one ethanol trader with a major producer.

Spot ethanol was offered at $2.90 per gallon, up from about $2.80 late Friday, adding to last week’s 30 cents gains, traders said.

Ethanol plants in the region have also been hit hard by flooding, with over 300 million gallons per year of ethanol production currently off-line, according to Iowa Renewable Fuels Association estimates.

“If predictions of river cresting into early next week prove correct, that number could grow to over 400 million gallons,” the Iowa RFA said in a statement release Friday.

“Even as the rivers recede, based upon the reports we’ve received, it could likely be some time before production can return to normal levels,” the Iowa RFA said. (Reporting by Rebekah Kebede; additional reporting by Janet McGurty; Editing by Marguerita Choy)