Ethanol Blog
Rick Kment DTN Analyst

Tuesday 08/19/14

Retracement in Ethanol Continues

Ethanol prices see further market erosion Tuesday with losses of 1 to 1.8 cents per gallon developing. The focus in the ethanol complex broke out of the typical mold of grain market or gasoline market direction with each of these markets moving higher.

This is starting to turn the focus away from overall ethanol production costs which are tied to corn prices, and at least for the moment away from inventory levels. Ethanol traders are starting to look more at longer-term demand following the upcoming Labor Day holiday weekend.

Front-month September contracts have fallen 6 cents per gallon lower over the last week, but still carry a significant premium to deferred contract months based on short-term demand expectations. But the recent pressure in the market makes more sense when measured against the 21-cent surge in ethanol prices through the first half of August.

These gains focused on aggressive inventory reductions and demand support in late July and early August. But traders remain extremely cautious now that the traditional driving season is wrapping up, and economic uncertainty still is plaguing overall consumer spending. This could lead to additional short- and long-term pressure in ethanol prices through early fall.

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

(ES)

Posted at 2:32PM CDT 08/19/14 by Rick Kment
Post a Blog Comment:
Your Comment:
DTN reserves the right to delete comments posted to any of our blogs and forums, for reasons including profanity, libel, irrelevant personal attacks and advertisements.
Blog Home Pages
June  2015
S M T W T F S
   1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30            
Subscribe to Ethanol Blog RSS
Recent Blog Posts
  • Grains Council Team Educates Southern Mexico Cattle Industry
  • Spot Ethanol Values Boosted by Corn Futures Rally
  • Energy Pressure Follows Weaker Stock Market
  • Argo, NYH Spot Ethanol Edge Lower With Corn, RBOB Futures
  • DDG Price Decline Slows Amid Sluggish Trade
  • Argo, NYH Spot Ethanol Trade Higher on Corn Futures Rally
  • Spot Ethanol Price Gains Backed by Corn Futures Rally
  • Grains Council Educates Japanese Swine Producers on DDGS
  • Uncertainty Seen in Ethanol Market Direction
  • Spot Ethanol Prices Higher on Falling Ethanol Stocks
  • Corn Rally Draws Ethanol Support
  • Spot Ethanol Prices Track Corn Futures Higher
  • Chinese Trade Disruptions Result in DDG Price Plunge
  • Ethanol Futures Close Week Higher
  • Conference: Aquaculture Must Diversify Feed Ingredients
  • Spot Ethanol Prices Soften on Rising Supply
  • Spot Ethanol Prices Mixed on Weekly EIA Supply Data
  • New York Spot Ethanol Biggest Gainer as Market Rebounds
  • China Rumors Worry DDG Market
  • Ethanol Futures Follow Outside Markets Lower