Ethanol Blog
Rick Kment DTN Analyst

Monday 06/30/14

Corn Prices Pressure Ethanol Futures Lower

Sharp losses developed quickly in corn futures following the USDA stocks and acreage reports Monday. The reported buildup in corn stocks and the inability to significantly reduce corn acreage from earlier estimates pressured futures contracts lower. July futures fell 18 cents per bushel, while other nearby contracts posted 21 to 23 cent per bushel losses. Lower production costs are going to make it extremely difficult to allow price support to return to ethanol futures or spot markets. The fading of overall demand through the last half of the summer may also create a challenge for ethanol prices through the rest of the year. Compared to the sharp losses in corn prices, ethanol markets remained moderately stable with losses limited to 1.7 to 2.1 cents per gallon. Front-month futures are still holding a strong premium to deferred contracts with short-term demand likely to help maintain any stability still seen in the market. The upcoming EIA report, which will measure both production and inventory levels at the end of last week, are likely play an even bigger role in ethanol price direction than the movement in corn markets Monday.

(ES)

Posted at 3:57PM CDT 06/30/14 by Rick Kment
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