Spot ethanol prices at Argo and New York Harbor trade hubs surged roughly 10 cents in early trade Monday as supply fears combined with a rally by Chicago Mercantile Exchange corn futures to spur short covering ahead of the Labor Day holiday weekend.
This week transfer Argo ethanol was seen at a $2.64 to $2.68 per gallon bid/ask spread, while prompt New York Harbor ethanol barge was seen at a $2.80 to $2.81 per gallon bid/ask spread.
"Corn is being lifted by the weather and soybeans and ethanol is just keeping pace again," said a trader. "There might also be some production worries with ethanol as we get into Sept days."
Others agreed. "Ethanol (supply) is tight, that's why you are seeing this big rally. There isn't any product to buy. I think we'll see a big draw when the EIA data comes out on Wednesday because we are going into maintenance period," added another trader.
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