Ethanol Blog
Rick Kment DTN Analyst

Monday 08/12/13

Corn Market Rally Sparks Ethanol Buying

Driven by strong buyer support in the corn market, ethanol buyer activity developed across all nearby contracts. The adjustment in corn production numbers helped to draw additional buyer support quickly into the corn market late morning following the release of the report.

Traders are focusing on the increased short-term impact of the market related to corn price gains, and the potential to build additional bullishness back into the market over the next two weeks.

Gains in nearby contracts were contained into a narrow range, increasing 1.7 to 1.9 cents per gallon through the end of the year. But the support dwindled quickly through 2014 contract months with ethanol prices only posting fractional gains. The expectation is that this report will have a short-to-moderate-term impact on the market, and longer-term market shifts and corn availability have already been factored into the market.

Although there are still a lot of unknowns through the corn and ethanol markets before the end of the year, any shift in corn may be undermined by the direction of ethanol demand during August and September.

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

Posted at 2:51PM CDT 08/12/13 by Rick Kment
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