Ethanol Blog

Ethanol prices remained impressively stable in early week trade despite moderate to strong pressure in both corn and energy markets after traders returned from the Christmas weekend. Although nearby ethanol contracts were able to post fractional gains, the complex seems to be focused on expectations that additional inventory pressure may be seen over the next couple of weeks. Holiday travel and the already lower energy prices should help spark additional driving activity through the end of the year. Currently the ethanol market is holding a 20-cent premium over front-month RBOB gasoline prices. This may be a hard to maintain over coming weeks despite recent firmness in the corn market. As ethanol production levels continue to rise, it is likely additional softness will develop in nearby and deferred ethanol contracts, eroding the current market premium over the gasoline market.

(CZ)

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