With futures markets heading into the week of Thanksgiving, and expected holiday travel plans likely to help draw additional need for gasoline and ethanol product, prices of ethanol have seen amazing market support in front-month futures.
December ethanol futures have led the way higher, posting double-digit gains each of the last two weeks. Currently weekly price gains of 25.8 cents per gallon helped to boost front-month contracts over $2 per gallon for the first time since August.
This week's move follows a 10.3-cent-per-gallon price shift the week previous. The combined support over 36 cents per gallon represents what has been a rebound in the market and has established potential long-term support at $1.67 per gallon.
Short term needs are the main driver of the most recent market support, and is causing anxiety as to what will happen once holiday demand is accounted for. But for now, traders are aggressively sourcing short-term support, widening the premium in front-month futures with little concern to how the market will land after Jan. 1.
Rick Kment can be reached at firstname.lastname@example.org
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