Ethanol futures continue to push lower during early January as traders have returned from the long holiday weekend, and are unwilling to focus on moving prices higher as they look for potential demand slowdowns through the first quarter of the 2016.
After being able to establish some stability at $1.40 per gallon in the last week of December, ethanol contracts have quickly and aggressively moved to new contract lows and are within range of setting all-time lows for futures prices.
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There may continue to remain additional price weakness through the next several weeks as corn markets remain in a unstable sideways pattern through most of January on concerns of lackluster demand and growing supplies while overall seasonal driving demand is still slipping from holiday slowdowns.
January and February traditionally are inventory building times for the ethanol industry where demand remains sluggish. This will likely allow for additional price pressure over the next couple weeks, and potentially allow for all=time market lows through the next several months based on the currently lower grain and energy prices.
Rick Kment can be reached at firstname.lastname@example.org
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