Despite the moderate pressure in the corn market early in the session and sharp losses Monday across corn and ethanol markets, front-month futures bounced higher Tuesday.
The 1-cent gain in the December and January contracts seemed to create a sense of stability across the ethanol complex, while traders are still uncertain about if grain and energy prices have the legs under them to push significantly higher in the near future.
Front-month December corn futures closed 5 cents per bushel higher after overcoming moderate to strong midday pressure. This indicates that additional commercial buying support is growing following the widespread liquidation over the last couple of days.
Ethanol futures are expected to continue to closely follow the corn market direction, but traders are likely to not become too aggressive over the near future. There still remain a lot of questions on just how supportive short and long term ethanol demand will remain, and how ethanol inventory levels will do through the end of the year following cleanup activities through the Northeast.
Rick Kment can be reached at firstname.lastname@example.org
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