Firm buyer support continues to develop through the daily ethanol markets with traders quickly and actively stepping into the complex, as they focus on recent support in corn prices and tightness of supply that may continue to be seen through the rest of the year.
Traders have quickly noticed that a major shift has developed at the end of the week in spot prices, with a 10-cent discount quickly developing in the continuous ethanol chart, as front-month contracts have shifted from the October to November contract month due to October contracts expiring Wednesday.
This narrows the price spread between nearby ethanol contracts, but also shifted the premium of ethanol over RBOB gasoline from more than 10 cents per gallon to a fractional level Thursday. That premium expanded slightly once again by Friday afternoon. Strong demand continues to be seen in both RBOB gasoline and ethanol markets during early October, which may continue to draw firm buyer interest through the rest of the month, especially as supply tightness continues to be the main focus of many traders.
Rick Kment can be reached at firstname.lastname@example.org
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