Even with additional pressure in corn prices Wednesday, front-month ethanol prices continue to gain support. September contracts posted a narrow gain of 0.3 cents per gallon, pushing prices to $2.483 a gallon.
Traders continue to focus on short-term needs by producers as trades focus on the potential that the latest bullish run in corn prices could still reduce ethanol production at a time when demand remains stable. Overall demand is expected to slow through the next couple of months following slowing gasoline demand.
But the aggressive wide price spread between September and October contracts is keeping traders active. September contracts are now holding a 58-cent premium to the October contract, which will create additional market volatility through the complex as September contracts move to expiration.
Rick Kment can be reached at firstname.lastname@example.org
© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.