Ethanol Blog

Nearby ethanol futures contracts have been limited to narrow fractional price shifts over the last two trading sessions. The sharp losses seen over the last week and a half surrounding the aggressive moves lower in corn prices seem to have been worked through the market. Corn futures prices are holding below $5 per bushel in new-crop corn contracts. This could add additional pressure to the ethanol market long term, but with operating costs lower for many plants, there is a lot of concern about overproduction once again. August ethanol futures are holding at $2.23 per gallon, and posting a fractional gain on Monday as traders are still focusing on potential demand growth through the rest of the summer. Traders may continue to look drive deferred contracts lower based on potential weakness in cash corn markets through harvest. But nearby contracts may start to develop a tight trading range over the next couple of weeks.

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

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