Ethanol Blog

Ethanol futures bounced higher Thursday following sharp losses during the previous three trading sessions. The main driver of the turnaround in the ethanol market price is the sharp reduction of inventory levels seen in the EIA report.

Total supplies of ethanol fell 1.6% at the end of last week compared to the week previous. Year-over-year comparisons still has current inventory levels 14.9% over 2014 levels, but the pace as which supplies are eroding and the growth in demand is creating many who were worried about another ethanol glut to step back into the market incase supplies continue to tighten and prices surge higher.

Price gains were limited to 1.4 to 2 cents per gallon gains, as long term impacts of growing production rates may have a greater impact on long-term price activity rather than holiday supply shifts,

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

(ES)

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