Ethanol inventory levels dipped 4.3% at the end of last week, prompting buyers to quickly step back into the market following the release of the latest EIA report Wednesday, even though corn price shifted lower on the complex midweek.
Ethanol futures posted fractional gains at the end of the session Wednesday with June contracts posting a 0.2-cent-per-gallon rally, moving to $1.529 per gallon. The rest of the complex posted a 0.4-cent-per-gallon rally. The fact that corn prices posted 3- to 5-cent losses makes the impact of the fractional rally in ethanol market meaningful due to the shift lower in inventory levels. The inventory levels for gasoline and crude oil also fell at the end of last week, sparking strong buyer support through the complex Wednesday. The combination of seasonal support and tightening supplies continues to be driving prices higher through the middle of May, leaving additional price activity moves likely over the next couple weeks.
Rick Kment can be reached at firstname.lastname@example.org
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