Front-month ethanol futures are holding a 4-cent premium to RBOB gasoline prices Thursday following light-to-moderate pressure in both markets through the latest trading session.
This narrows the premium level from earlier in the month when ethanol carried a 12-cent per gallon premium over the RBOB gasoline market, although the volatility in both markets over the last two months has kept the balance of premiums going back and forth between the two markets on a regular basis.
Strong corn buyer support based on renewed support from worldwide demand is the main focus surrounding the recent movement higher in the corn market, while growing crude oil and gasoline supplies through April are overshadowing the seasonal demand growth that is expected to continue to develop over the coming weeks.
Ethanol and RBOB gasoline futures posted moderate pressure Thursday. Light trade volume limited trade interest across the complex. Traders focused on the lack of underlying fundamental market news seen in the market and inability for the rally in financial and stock markets to spark any additional interest from commercial or noncommercial buyers across the energy sector.
It is likely that the ethanol and RBOB gasoline market will continue to leap frog through April, each market taking the premium for a time, based on narrow trade interest, but unable to separate prices significantly from the other market.
Rick Kment can be reached at firstname.lastname@example.org
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