Ethanol futures posted aggressive buyer support in all nearby contracts Monday. Traders are looking for additional direction as the week continues, but the weather conditions have slowed product movement to end locations and are quickly tightening ethanol supplies.
Most of the ethanol moves around the country on railcar, and storms and cold weather through the last couple of weeks have limited movement of product to needed destinations, but also kept cars from returning to the Midwest to be refilled with product. This is starting to tighten supplies in many areas of the country, and pushed futures prices sharply higher.
March futures rallied 7 cents per gallon, to close at $2.14 per gallon. Other nearby contracts rallied 3.6 to 5.8 cents per gallon, despite lower corn prices and narrow moves in RBOB gasoline futures. Price support is likely to continue to develop due to the time it will take to get needed product to consumers.
Rick Kment can be reached at email@example.com
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