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
April  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
  • Spot Ethanol Prices Track Corn Futures Lower
  • Spot Ethanol Prices Retreat on Profit-Taking
  • DDG Prices Drop as Barge Freight Falls
  • West Coast Spot Ethanol Prices Spike on Short Squeeze
  • Spot Ethanol Prices Pressured by Bearish EIA Data
  • DDGS Play Vital Role in Nebraska Ethanol Impact
  • Spot Ethanol Prices Flat to Up as Supply Data Eyed
  • Argo, PNW Spot Ethanol Prices Nudge Higher in Thin Trade
  • An Economic Case for Ethanol
  • Spot Ethanol Gains at Argo, Steady in New York Harbor
  • Grains Council Works to Open Cuban Markets
  • Ethanol Production Sliding Lower
  • Spot Ethanol Advances After Bullish Weekly Supply Report
  • D6 RINs Extend Higher; Spot Ethanol Prices Flat
  • D6 RINs Edge Higher While Spot Ethanol Prices Ease
  • Corn Prices Remain Range Bound
  • DDGS Rise to Highest Level in Five Months
  • Spot Ethanol Prices Weaken Amid Sluggish Demand
  • Gasoline Stocks Change Direction
  • Spot Ethanol Prices Mostly Flat in Lackluster Trade