Ethanol supplies bounced higher for the first time in three weeks after seeing moderate drawdowns through the middle of April. The latest EIA data posted moderate growth from last week's levels.
This puts overall inventory levels 6.7% ahead of year-ago levels. Traders continue to focus on the surplus of product available to the market. This created moderate market pressure through all except front-month May contracts which expired Wednesday, unchanged at $1.513 a gallon. The rest of the complex lost 1 to 1.2 cents per gallon; each contract month has now moved below the $1.50-per-gallon level once again with traders pulling back from the market highs that peaked through the middle of April.
It is too early to clearly state if the seasonal high has been set, but the recent market shift would appear that seasonal trends are running their course and overall market activity is not starting to struggle to find underlying support going forward.
The lack of support in both the corn and gasoline markets through the last couple of trading sessions have also lead to limited momentum through the entire complex. This could lead to additional market shifts, and may bring additional weakness back into the complex.
Rick Kment can be reached at firstname.lastname@example.org
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