Ethanol Blog
Rick Kment DTN Analyst

Monday 07/29/13

Ethanol Prices Find Stability Early in Week

Nearby ethanol futures contracts have been limited to narrow fractional price shifts over the last two trading sessions. The sharp losses seen over the last week and a half surrounding the aggressive moves lower in corn prices seem to have been worked through the market. Corn futures prices are holding below $5 per bushel in new-crop corn contracts. This could add additional pressure to the ethanol market long term, but with operating costs lower for many plants, there is a lot of concern about overproduction once again. August ethanol futures are holding at $2.23 per gallon, and posting a fractional gain on Monday as traders are still focusing on potential demand growth through the rest of the summer. Traders may continue to look drive deferred contracts lower based on potential weakness in cash corn markets through harvest. But nearby contracts may start to develop a tight trading range over the next couple of weeks.

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

Posted at 5:10PM CDT 07/29/13 by Rick Kment
Comments (1)
Rick, has anyone thought of the impact of 1) vacations 2) turn around schedule. With a complex working with fewer plants, anyone going down will pull down production. Selling at low cost now is just unwise. Turning a plant on is risky as the corn is not where the plant is. This caused the plants to be down in the first place. Go out to speculate on the spot market where the price does not stay up for one week. rather wait for a freeze to sell corn. One better live with a solid plan than day-trade in ethanol - contracts to cover just a few tens of thousand gallons in a daily 34 million complex.
Posted by Eddy Lahens at 5:49PM CDT 07/29/13
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