Ethanol Blog
Rick Kment DTN Analyst

Tuesday 09/18/12

A Crack in the Ethanol Boat Hull

The combined 41 cent loss in December corn futures over the last two trading sessions has created increased uncertainty across the ethanol markets through the middle of September. Even before this most recent downward slide in corn prices, the ethanol market seemed extremely vulnerable as traders were uncertain of both short- and long-term direction in the corn market as well as the ability to sustain current demand for ethanol through the end of the year. But as general commodity pressure pushed grain markets lower based on widespread fund liquidation, ethanol futures fell over 14 cents per gallon. Although the market is still technically held together, cracks are showing in the market as traders adjust not only to lower production costs, but also the uncertainty of futures market direction. The long-term outlook is still showing tight corn supplies, but with no additional news surrounding the projections of running out of corn, investment traders are growing tired of the same old headlines. This has pushed ethanol futures prices to $2.279 cents per gallon, which is the lowest price since the first week in July. Corn futures have given back nearly $1 per bushel from the August highs, with additional pressure likely to develop without any new reasons to attract the investment interest back into the market.

Rick Kment can be reached at

Posted at 2:33PM CDT 09/18/12 by Rick Kment
Post a Blog Comment:
Your Comment:
DTN reserves the right to delete comments posted to any of our blogs and forums, for reasons including profanity, libel, irrelevant personal attacks and advertisements.
Blog Home Pages
June  2015
   1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30            
Subscribe to Ethanol Blog RSS
Recent Blog Posts
  • Grains Council Team Educates Southern Mexico Cattle Industry
  • Spot Ethanol Values Boosted by Corn Futures Rally
  • Energy Pressure Follows Weaker Stock Market
  • Argo, NYH Spot Ethanol Edge Lower With Corn, RBOB Futures
  • DDG Price Decline Slows Amid Sluggish Trade
  • Argo, NYH Spot Ethanol Trade Higher on Corn Futures Rally
  • Spot Ethanol Price Gains Backed by Corn Futures Rally
  • Grains Council Educates Japanese Swine Producers on DDGS
  • Uncertainty Seen in Ethanol Market Direction
  • Spot Ethanol Prices Higher on Falling Ethanol Stocks
  • Corn Rally Draws Ethanol Support
  • Spot Ethanol Prices Track Corn Futures Higher
  • Chinese Trade Disruptions Result in DDG Price Plunge
  • Ethanol Futures Close Week Higher
  • Conference: Aquaculture Must Diversify Feed Ingredients
  • Spot Ethanol Prices Soften on Rising Supply
  • Spot Ethanol Prices Mixed on Weekly EIA Supply Data
  • New York Spot Ethanol Biggest Gainer as Market Rebounds
  • China Rumors Worry DDG Market
  • Ethanol Futures Follow Outside Markets Lower