Front-month March ethanol futures surged higher Friday following rekindled support in corn markets and moderate follow through buying interest seen in RBOB gasoline futures. March ethanol futures closed at $2.057 a gallon after rallying 4.4 cents per gallon.
The strong support in the market continues to focus on the need to gain access to short-term supplies despite continued growth in production levels. Commercial buyers continue to drive the market higher, with little concern for follow through support in the corn market, which traditionally has dictated overall prices support and buyer interest in the past.
But with corn unable to show significant movement over the several weeks, ethanol traders are looking more to local demand direction, as well as moves in the energy market.
RBOB gasoline markets rallied 2 to 2.8 cents per gallon Friday, but the discounted March contracts appear to be losing buyer interest to the April contract. This is starting to place more emphasis on futures prices near $3 per gallon, and also indicate the recent firmness of ethanol prices.
Rick Kment can be reached at email@example.com
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