Ethanol Blog

Corn Pressure Starting to Cool Ethanol Prices

Rick Kment
By  Rick Kment , DTN Analyst

Ethanol futures prices trickled lower Tuesday as traders seemed to slowly run out of gas following the combination of lower corn trade both Monday and Tuesday. This led to December contracts slipping a fraction of a cent per gallon, moving to $2.058 a gallon.

This is the first downturn in the market since early last week, and could create additional follow-through pressure through both nearby and deferred contracts if increased corn market pressure is seen over the next couple of trading sessions.

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Traders in deferred contracts are less aggressive as prices fell 2.2 cents per gallon in most contract months and widened the price spread between spot month and deferred contracts. More attention will be placed on the EIA data which will be released Wednesday, as traders look for direction of inventory levels, and also a sense of how strong overall production of ethanol is through early November.

With the upcoming Thanksgiving holiday next week, there may be some price volatility as trade volume typically remains sluggish during the week of a major holiday.

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

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