Ethanol Blog

Ethanol Futures Shift Lower Following Energy Market Slide

By Rick Kment , DTN Analyst

Ethanol futures have broken lower over the last couple trading sessions with nearby contracts posting a 1.3 cent loss. Traders focused on follow-through pressure in RBOB gasoline markets which settled 3.66 per cents per gallon lower at 95 cents per gallon. This is once again setting contract lows, posting the lowest prices since late 2008. There were many other outside market factors affecting the overall market. Crude oil futures fell below $30 per barrel once again and stock markets posted aggressive triple-digit losses, creating significant uncertainty about not only energy markets but the overall economy as a whole. For the most part, ethanol prices have been able to break away from the plummeting gasoline market with cost of production and corn costs being a bigger factor in price factors. But this may be starting to change as RBOB gasoline prices below $1 per gallon in futures markets are starting to create uncertainty in ethanol futures and create concern about the extremely wide premium currently held in the ethanol market.



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