Even though Tuesday's move in the ethanol market was significantly less dramatic than the previous two trading sessions, the rally in front-month February futures of 1.3 cents per gallon moved the ethanol market back to $2.34 per gallon.
This is a price not achieved in the February contract since early December. Overall, the building support in the corn market following the Friday release of the USDA crop production report has accounted for a gain of nearly 10 cents per gallon in front-month contracts.
Given the lack of activity through the grain and ethanol markets, it seems that the initial surge in buyer interest through the corn market has eroded.
This could limit additional trade interest seen in nearby ethanol contracts. The focus of the market remains on front-month ethanol contracts, as traders continue to balance large ethanol supplies with uncertainty about corn supplies for future ethanol production.
Rick Kment can be reached at email@example.com
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