The ethanol markets have been quickly shifted by differing market factors over the last few months, and weekly inventory level changes seem to be one of the most focused on factors in overall short- and long-term ethanol price moves.
Data released Wednesday morning from the EIA posted total ethanol stocks changing very little from week-ago levels, which is helping to leave the market moderately supported. The expectation that inventory levels would continue to grow through the end of July seems to be not be the case with stocks actually slipping 210,000 gallons.
Even though 210,000 gallons is a large amount, compared to total overall stocks of 753.5 million gallons, it is just a sliver of the overall pie. This also moved overall ethanol stocks to a four-week low despite ethanol production increasing over the last week.
Ethanol prices gained 1 to 2.7 cents per gallon, but the lack of market-shaking moves in the EIA report allowed for gains of 2 to 3 cents in the corn market to be the biggest factor in the daily price shifts through the ethanol complex. Traders will continue to closely follow the shifts in the corn markets, while corn prices closer to $3.50 per bushel than $4 per bushel will likely spark additional ethanol production through the remainder of the summer.
Rick Kment can be reached at firstname.lastname@example.org
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