The relationship between ethanol and corn futures did not follow the typical pattern Tuesday as traders quickly jumped ship from higher corn prices and aligned with energy market moves.
The lack of support in energy markets pushed RBOB gasoline futures more than 8 cents per gallon lower, and caused crude oil futures to fall $1.59 per barrel.
Traders are now becoming extremely nervous about the stability of the European economy. This lack of support could easily derail any expected demand growth for energy markets through much of the spring and summer months. This in turn would have a drastic impact on the ethanol market which has been banking on demand growth through the summer.
Bad memories of the gasoline demand spike that never materialized in 2012 has many ethanol traders concerned that the pattern may continue if Europe's economy is not stabilized once again.
Rick Kment can be reached at email@example.com
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