Ethanol futures continue to ratchet higher Friday afternoon with traders focusing on additional firmness in short-term ethanol supplies and long-term corn supplies although corn prices slipped lower during the Friday session.
The renewed buyer support in the ethanol market has moved the ethanol market to a four-month high, posting the highest price level since early June, and rallying 31 cents per gallon in three months from the summer low set in early August.
The ability to steadily and consistently bring buying activity back into the market over the last three months is based on the combination of firm support from corn and gasoline demand seen through the fall. The potential that additional increased ethanol blending activity may continue to develop through the end of the year despite traditional market slowdowns may create some uncertainty through the complex.
Trade pressure developed in energy markets Friday, but this lack of support is not expected to be a significant gauge of the overall market as trader interest in the market has remained extremely light at the end of the week. Many traders have already squared positions for month-end, willing to wait until the middle of next week before stepping back into the complex.
Rick Kment can be reached at firstname.lastname@example.org
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