Ethanol Blog
Rick Kment DTN Analyst

Tuesday 04/15/14

Ethanol Support Showing Cracks

Ethanol futures are tumbling lower, and the aggressive jostling seen in the market over the past two weeks resembles a dropped Easter egg basket. What seemed to be well-hardened and impermeable shells to market support in the ethanol market over the last couple of months, has led to aggressive market pressure and quickly falling front month contracts. May futures have falling over 54 cents per gallon since the first of the month. The continuous ethanol chart has proven extremely bearish with ethanol prices moving more than $1.25 per gallon lower due to the expiration of April contract months. The lack of price support has not been fully worked through the rest of the system, and could create significant ripples through the rest of the spring and early summer months. Even though nearby ethanol remains weak, the expectation that market stability will be seen over the next two weeks should help to limit additional wide losses. May contracts posted a 9.5 cent per gallon loss, closing at $2.247 a gallon and narrowing the May-to-June price spread to 10 cents per gallon. Widespread losses in spot and rack markets are likely to add additional pressure to the complex through the upcoming days.

Rick Kment can be reached at rick.kment@dtn.com

(ES)

Posted at 2:43PM CDT 04/15/14 by Rick Kment
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