Ethanol Blog

Ethanol Premium Erodes

Rick Kment
By  Rick Kment , DTN Analyst

Ethanol futures have posted strong losses through the week with the front-month January contract slipping 2 cents per gallon lower Friday. This added up to a 9.6 cent per gallon loss for the week. Traders continue to focus on the erosion in the energy market, which has put ethanol futures under significant pressure despite the back and forth choppiness in the corn market. Nearby ethanol contracts appear to be focusing on the potential for previous logistics problems to continue through the next several weeks. This is putting the gasoline and ethanol market on a more even playing field and it appears that longer-term support for each of the markets is just above $1.50 per gallon. Volatility over the holidays could spark additional market shifts, but a lot of uncertainty remains surrounding long-term demand and available supplies in early 2015.

(CZ)

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