Ethanol futures quickly responded to tighter corn supply numbers in the USDA report today. This helped to draw additional support into corn futures which closed 6 to 7 cents per bushel higher. Traders are looking for additional potential support early next week which could draw additional interest back into the market.
Ethanol prices rallied 6.7 cents per gallon higher during the last two trading sessions. This abrupt and aggressive shift in price has started to affect the market tone. Additional moderate gains through the first part of next week could move through initial resistance levels in October, and draw additional buyer support into the market.
Over the next several weeks, emphasis is likely to be placed back on the direction of corn prices and availability of corn for processors. Demand for ethanol, as well as gasoline, is expected to continue to fade through the upcoming weeks. This could limit price support of both markets.
Rick Kment can be reached at firstname.lastname@example.org
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