February ethanol futures tried to keep up with the aggressive sharp pressure in both RBOB gasoline and crude oil futures Monday, but the overall lack of trade activity seemed to limit selling pressure through the end of the session.
The market tone was driven by sharp losses in crude oil futures which fell over $2 per barrel while RBOB gasoline futures quickly broke through short-term support levels, falling more than 6 cents per gallon.
The focus on production growth of crude oil and RBOB gasoline through the first quarter of the year despite a pullback by OPEC production levels has created widespread selling. Non-OPEC countries have posted increases in oil production, which is offsetting market support seen during the last month. This is expected to bring additional pressure into all energy markets, and put increased weakness on nearby ethanol futures. Front-month ethanol futures closed at $1.524 per gallon after losing 2.7 cents per gallon. A move below $1.50 per gallon over the week would likely spark additional market pressure through the complex.
Rick Kment can be reached at firstname.lastname@example.org
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