Every once in a while it is helpful to step back from the market and get a chance to see the wider perspective of market moves and overall trend.
The ethanol market is one of those markets that you need to step back and appreciate what has been accomplished over the last two months.
The greatest accomplishment seen when stepping back is the fact that markets have remained stable.
Yes, prices have shifted higher and lower in a moderate range, but the boundaries of these ranges have been contained. August ethanol futures closed at $2.09 per gallon. This is the same price point seen at the end of June. In contrast to that, September corn futures fell 62 cents per bushel in the same time period. September RBOB gasoline futures fell 29 cents per gallon.
The ability to keep ethanol prices level at a time when prices are tumbling around the market is no small feat, but so far, the ethanol market continues to trudge along, creating even more stability day by day. Seasonal pressure is expected to limit buyer support in the ethanol market during the coming months, but it should still remain much more stable than either the corn or RBOB gasoline market in the upcoming months.
Rick Kment can be reached at email@example.com
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