Ethanol futures pulled lower Thursday as traders slowly backed away from the strong market shift higher seen over the last three weeks. Since the third week in January, ethanol futures have moved 14 cents per gallon higher in front-month March futures.
This has created the desire by some to square positions through the end of the week. The increased supply level in ethanol at the end of the week has caused traders to back away from the strong market rally that developed midweek and earlier in the week.
March ethanol futures fell 1.5 cent per gallon in front-month futures while prices in all other contracts fell 1.1 cent per gallon. This pushed front-month futures to $1.589 per gallon.
The expectation is that traders will continue to move back into the market over the next couple of trading sessions, while the focus is squarely based on the strong demand seen across the market. The recent support in gasoline prices based on growing demand is helping to bring additional support to ethanol markets.
Rick Kment can be reached at firstname.lastname@example.org
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