Ethanol Blog

January ethanol futures fell nearly 11 cents per gallon as prices have quickly eroded over the last three trading sessions of January. Following the New Year, the focus has moved away from traveling activity and the potential to sustain strong premiums in ethanol prices over gasoline markets, to typically sluggish winter and spring demand.

All nearby contract prices are within a 1-cent price range, which is a significant shift for the entire market which has been holding spot product at a premium based on tight short-term supplies. The focus through the complex is likely to follow the direction of the falling gasoline market price, which is eroding plant margins as corn prices are not willing to move significantly lower over the last few trading sessions. Lack of support in the stock market during early January is creating additional uncertainty through the entire commodity markets, which may cause some added volatility to ethanol in the near future.

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

(ES)

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