February ethanol futures posted a strong rally over the week with gains for the week listed at 8.4 cents per gallon. Although this is slightly lower than last week's gains, the ability to continue to move higher at such an aggressive pace is impressive through the first three weeks of the year.
All together, the market has gained 19 cents per gallon over the last two weeks, and is not only taking into account the higher production costs developing from the corn market, but is also focusing on the ability for ethanol traders to step back into the market on their own merit as they focus on the potential of stronger demand potential during the next several weeks.
The rally from January lows in the RBOB gasoline market and subsequent rally of 9 cents per gallon has created some bullishness to develop through the gasoline and ethanol markets as they focus on the ability to rally demand despite the large stocks currently seen in each of the markets.
If additional momentum is seen through the next two weeks, additional widespread buying could develop.
Rick Kment can be reached at email@example.com