Nearby ethanol futures continue to break lower, moving further away from the $1.60 per gallon price point as prices posted losses of 2 to 3 cents through the trading session and have fallen a combination of 4 cents per gallon through the first two days of November.
The lack of support in ethanol markets comes as corn markets have bounced firmly higher and aggressive commercial buying flooded the energy complex. Spot month December RBOB gasoline futures skyrocketed higher with a 7-cent-per-gallon rally, moving to $1.44 per gallon. The early November support in the market put more emphasis on support in gasoline markets and the potential for demand changes over the next two weeks; it also helped create triple-digit gains in the crude oil market.
These gains may lead additional volatility going into Wednesday's EIA report-based market where traders will also focus on inventory changes over the last week, and assess potential shifts ahead of the holiday season. Potential shifts domestically and global economic factors through the end of the year are also playing a significant factor in how traders start to approach the energy complex going into the holiday season. This may create more volatility for gasoline and ethanol markets during upcoming weeks.
Rick Kment can be reached at firstname.lastname@example.org
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