Aggressive ethanol buying quickly developed through the market Friday afternoon after corn futures closed the session 6 cents per bushel higher and energy prices continue to shoot higher following the renewed buyer support in the RBOB gasoline and crude oil complex.
January ethanol futures settled at $1.683 per gallon, the highest close in January contracts since August 2014. Today's close is the highest price level in the continuous front-month contract since the middle of June.
January futures rallied 4.4 cent per gallon rally with the rest of the complex posting gains of 2.4 to 3.8 cents per gallon. Additional support continues to drive buyers back into the market, which may spark additional activity through the rest of the complex.
Crude oil futures have rebounded over the last two trading sessions, putting more emphasis on reinstating the short-term high and potentially breaking through resistance levels set last week. The combination of higher corn and crude oil markets may make it hard to limit follow-through buyer support in the ethanol market next week. There continues to be a short term focus on demand needs, but the overall outlook continues to affect short-term price levels, but also product availability and price through much of 2017.
Rick Kment can be reached at firstname.lastname@example.org
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