After posting seven-month highs in February contracts on Friday, traders started to slowly back away from the recent support seen in the ethanol market.
Surrounding the light-to-moderate pressure in ethanol futures was narrow price movements in corn futures while energy and financial markets turned lower early in the week.
February ethanol futures slipped 1.3 cents per gallon as traders remain concerned about short- and long-term demand growth. Triple-digit losses in the Dow Jones Index seemed to be the central point in weaker energy markets as traders seem to remain extremely cautious about short- and long-term market growth.
The wide price spread between front-month and deferred ethanol contracts is starting to add additional caution to traders who are looking at summer 2104 contract prices which are at a 20-cent discount to spot prices despite stronger ethanol demand through the summer months.
Rick Kment can be reached at firstname.lastname@example.org
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