Ethanol Blog

Front-month May ethanol futures rallied 24.4 cents per gallon higher for the week.

This is the first double-digit price shift since January. But the current surge even doubled the gains seen in January.

All in all, active buyer support was seen through all segments of the market, from a sharp rally in the corn market, which pushed July corn futures 41 cents per bushel higher, to reduced ethanol stocks, which implies increasing demand.

The outlook for the ethanol market remains strong as May gets under way. There is even some additional support developing in the energy and RBOB gasoline markets after May 1. The impressive gains in the ethanol market indicate that some things in the market are changing and firmness is holding.

But it would be premature to expect the market to continue these current patterns through the next several weeks. It is likely that traders will come back next week with a much more leveled approach to the market.

But the current market structure may be able to build on the current support and could help to systematically look for additional market support as May continues.

Rick Kment can be reached at rick.kment@telventdtn.com