Ethanol Blog

Ethanol Prices Chasing Corn Higher

Rick Kment
By  Rick Kment , DTN Analyst

Ethanol futures prices rallied higher for the second trading session in a row, setting an October high in the front-month November futures contract. The combined gains through the last week of the month are 10.5 cents per gallon. This strong price support and renewed interest in the ethanol market is riding on the back of strong price support in the corn market.

The expectation that corn prices may continue to gain both short term and long term buyer support is helping to keep active interest at the surface of all ethanol contracts.

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Prices across the complex posted strong gains Tuesday, which is creating some additional uniformity. There was even more focus on the Wednesday release of the EIA data, as traders looked for additional inventory reductions as seen the previous three weeks.

Although it is uncertain just how much additional support this will add to the market, the trend of lower stocks and stabilizing ethanol production could help to keep overall long term inventories in balance through spring and early summer of 2015.

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

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