Ethanol prices shot higher following early support in the corn market. This initial gain in the market helped to allow front-month December contracts to rally 1.4 cents per gallon higher, to close at $2.406 a gallon.
The reasoning behind this move pointed to corn futures racing to an early gain of 4 to 6 cents per bushel Monday morning as traders returned from the long holiday weekend.
But buyer interest slowly eroded through the trading session, with gains of 1 to 2 cents seen in nearby futures at closing bell. But probably the most significant shift in the ethanol market is that nearby contracts moved into an extremely tight trading range.
All contracts through February futures are trading with 0.2 cents per gallon, ranging from $2.406 to $2.408 a gallon. This consistency in the market allows traders to focus on the direction of outside markets with nearby spreads indicating a neutral market structure. This is not likely to change significantly during the remainder of the year.
Rick Kment can be reached at email@example.com
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