Ethanol Blog
George Orwel DTN Energy Reporter

Thursday 05/16/13

Holiday Travel Caused Ethanol Stability

June ethanol futures posted a fractional gain, closing 0.3 cents per gallon higher Thursday. This move higher follows a 9-cent loss in corn prices due to expected planting progress through much of the Corn Belt.

The expectation that additional buyer support will be seen through both the RBOB gasoline and ethanol market over the next couple of weeks is not surprising or new, buying before a holiday is typical.

But the renewed support in the front-month ethanol market offsetting such pressure in production costs points to traders needing additional supplies.

The recent pace of ethanol inventory draw-downs seem to indicate that unless ethanol production levels significantly improve over the near future, supplies will continue to tighten. With cash basis levels for old crop corn already strong, it is unlikely that many of these plants will be posting significant production gains during the next couple of months.

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

Posted at 4:44PM CDT 05/16/13 by George Orwel
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