Ethanol Blog

The glimmer of hope that renewed support would develop through the ethanol futures markets was extremely short-lived as additional pressure quickly jumped back into the market early Monday.

With the pressure in the corn market developing as buyers seem unwilling to step back to the plate, ethanol futures posted moderate to strong losses. January futures lost 2.1 cents per gallon, to close at $2.277 a gallon.

Traders are looking for additional support from outside markets, but given the lack of overall trade activity and weakness in grain futures, most buyers remain unreachable and unwilling to step off of the sidelines.

The expectation that trade activity may remain sluggish through the end of the year could increase pressure in the complex. Front-month futures are trading at the lowest level since September, but are still well above short-term support levels set at $2.23 per gallon.

Corn markets are still the main indicator of ethanol market direction, with production costs watched extremely closely due to the poor and mostly negative plant margins.

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

© Copyright 2012 DTN/The Progressive Farmer. All rights reserved.