Despite the fact that ethanol inventory levels continue to grow through the first week of July, traders seemed to quickly look past the inventory levels and focus nearly exclusively on falling production at the end of last week. Total ethanol production fell 2.7% last week and, given the trend over the last three weeks, may have peaked for the summer. Ethanol prices closed fractionally higher Wednesday following the EIA report. But with energy and corn markets posting moderate to strong losses on the futures market, the light gains in ethanol prices seem to be the significant winner of the trading session. It is uncertain if market stability can hold through the futures market over the next several days, especially if outside markets push lower.
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