Ethanol Blog
Rick Kment DTN Analyst

Tuesday 05/14/13

May Corn's Impact on Ethanol Futures

May corn futures go off the board Tuesday, and in the overall corn market the price shifts in the May contracts have little impact on most traders. But the 11-cent loss in the May contracts seemed to have an impact on the ethanol market.

Even though any hedges in the ethanol space would not be based on the May corn futures contracts, the simple fact of a double-digit loss in "front-month" futures contracts led June ethanol contracts 2.9 cents per gallon lower.

This indicates how shifts in the market price, even if overall volume levels may be minimal, can impact other markets. The rest of the corn market posted slight losses, which also carried into other ethanol contracts, falling fractionally through the late summer and fall contract months.

The May corn contract shift may have little to do with direction of the market, but the little bumps base on trader interest could indicate more stability once July corn futures are the spot month contract viewed by traders.

Just because a contact has little to no interest, the fact that it is listed as "front-month" futures implies some market weight by the occasional observer.

Rick Kment can be reached at rick.kment@telventdtn.com

Posted at 4:22PM CDT 05/14/13 by Rick Kment
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