Ethanol Blog

Traders continue to focus on pushing the ethanol market moderately lower in early-week trade, as the tone of the futures complex seen late last week is causing spillover pressure.

Front-month futures have fallen 10 cents per gallon during the last week, as the concern of strong production levels and fading demand is creating some underlying weakness in the market.

Even though current prices are still hovering nearly 3 cents per gallon above short-term support levels set in March, continued selling pressure through the upcoming trading sessions could spark some further liquidation if prices fall below $1.42 per gallon.

But moves in the ethanol complex were hard to separate from the rest of the market which posted moderate-to-strong losses through the session Monday. Corn prices fell 5 cents per bushel in early week losses, while energy markets posted moderate pressure and losses of 90 points are currently seen in the Dow Jones Index.

With a lot of trade still to be seen through the week, there is the potential that additional volatility could spark renewed buyer interest, but currently the tone of the ethanol market is slowly weakening.

(ES)

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