Ethanol Blog

Ethanol Futures Move to Three-Month Highs

Rick Kment
By  Rick Kment , DTN Analyst

Corn prices continue to draw buyer support as additional interest is moving into the complex based on uncertainty surrounding crop size and overall firming demand for corn through the upcoming weeks and months. Meanwhile, overall supply concerns in the ethanol market has pushed ethanol prices to the highest prices in more than three months.

Spot ethanol prices posted gains of 3.2 cents per gallon, closing at $1.602 per gallon. This is the highest close since June 14, and continues the counter seasonal market rally that is uncharacteristic of the ethanol market but also all energy markets during the last half of the year.

Even though front-month ethanol prices continue to hold moderate to strong premiums to deferred contracts, the concern that the higher prices will limit long-term demand through the next year.

This could have long lasting impacts on gasoline and ethanol demand, but also affect overall the economy as a whole. RBOB gasoline futures continue to surge higher with recent gains posting strong gains Tuesday as late-day contracts moving to $1.5011 per gallon. This has moved the front-month November contract to 2016 highs, as the focus on tighter supplies through the end of the year is drawing buyers back into the market.

Rick Kment can be reached at rick.kment@dtn.com

(ES)

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