Ethanol futures have continued to test resistance levels of $1.55 per gallon over the last several weeks only to fall back below these price levels.
One of the reasons that traders have pointed to the inability to move above this price is that corn prices have been unable to find uniform buyer support in the recent past as traders continue to look for increased plant production and strong crop size within the upcoming year, even though soybean crop acres will remain large.
Ethanol prices have continued to move to resistance levels of $1.55 per gallon and then move lower, with most moves staying within a 5-cent trading range. As crude oil futures have fallen below the $50-per-ton trading range, there continued to be some concern that additional market pressure may continue to develop in the near future in ethanol prices. This is even though demand for ethanol and RBOB gasoline will seasonally grow in the next two months.
This should help to push prices higher as consumer driving patterns increase as summer driving patterns increase through the nation and more product is used. However, for now, the tight trading range continues to hold, allowing for the potential for a breakout in either direction.
Rick Kment can be reached at firstname.lastname@example.org
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