Ethanol futures continue to ratchet higher with nearby gains posting support more than 1 cent per gallon during the initial trading session of the week. April futures settled at $1.533 per gallon after rallying 1.3 cents per gallon.
A combined total support in front-month ethanol futures of 5 cents per gallon is seen based on expectations of strong demand support expected over the coming weeks. A combination of lower expected production and seasonal blending gains is helping to aggressively pull buyers back into the market.
This recent market surge is countering the pressure seen through most of February, where prices fell more than 13 cents per gallon due to sluggish immediate demand and growing supplies. Even though corn prices remain extremely stable, the focus on upcoming plant slowdowns due to routine maintenance is expected to tighten supplies through the end of the month. Additional support may develop during the week even though energy and RBOB gasoline prices may continue to show pressure.
Rick Kment can be reached at email@example.com
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