Ethanol futures have rallied over 20 cents per gallon over the last month, moving from $1.48 cents per gallon in early May to just over $1.70 per gallon after the first week of June.
The combination of tightening ethanol stocks and lower production through late spring, while corn prices have shifted well-above $4 per bushel in front-month July futures contracts. The front-month ethanol futures contact has not moved to the highest price since December 2014.
However, the difference from the shift in 2014 is that prices were on their way down, while this sharp move higher is taking advantage of tighter supplies. Also, there's the potential that increased support could help bring additional support through the entire ethanol market through the rest of the year.
The wide premium over RBOB gasoline markets ethanol now carries is also adding uncertainty to the market, which could create some market shifts through mid to late summer, but for now most of the trader activity is likely to be based on the direction of corn prices over the next several weeks.
Rick Kment can be reached at firstname.lastname@example.org
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