Ethanol Blog

Front-month ethanol futures have fallen 60 cents per gallon through September. This is the largest loss since April when ethanol futures fell nearly $1.20 per gallon. The aggressive market price shift seen in April of 2014 was a result of increased transportation coming back on line, which brought prices back to typical levels after trading near record price levels. September's turn lower is expected to have a more long-lasting effect on ethanol demand and will also touch the corn market. The move lower now claims the lowest monthly chart close since the summer of 2010, and signifies a long-term downward trend in the monthly charts. More access to readily available corn with prices near $3 per bushel or less is helping spark additional production, while inventory through the country is growing and seasonal demand is slipping. This could create a significant backlog through the industry as storage is limited. This recent price shift lower has the potential to create some additional aggressive long-term market changing factors that could negatively impact both grain and ethanol markets over the near future if prices continue to show moderate to strong pressure.

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