Ethanol Blog

Fitting Into the Crowd

Rick Kment
By  Rick Kment , DTN Analyst

Ethanol futures posted strong gains as traders returned from the weekend, moving front-month October futures to the highest price since mid-July. The strength through the ethanol market seems to have been focused more on outside market shifts than any changes directly related to the ethanol complex.

While nearby ethanol contracts gained 4 to 5 cents per gallon, moving to $1.615 a gallon in front-month futures; it was not lost on the market that similar gains quickly developed in the RBOB gasoline complex, and crude oil futures posted gains near $1 per cwt in many nearby and deferred contract months.

The spark that led this uniform market shift higher is the aggressive move higher in stock markets, with the Dow Jones index rallying 300 points late Monday afternoon. This underlying support and expectation that traders will focus on potential improvements in consumer spending if stock markets continue to regain earlier losses is helping to drive additional interest into energy markets. Even though ethanol complex posted strong gains Monday, similar gains in several other markets camouflaged the strength in ethanol futures.

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

(ES)

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