Ethanol Blog

June ethanol futures rallied 3.4 cents per gallon higher over the last two trading sessions, accounting for the greatest push higher since early April, and since prices have fallen nearly 20 cents per gallon, from seasonal highs.

After what some feel may be have been long-term support levels of $1.451 per gallon. Moderate to strong buyer support has been seen in all contracts over the last two trading sessions. It is uncertain if follow-through buyer support will be consistent through the rest of the month, as seasonal highs are typically seen during this time of year.

But with the renewed buyer support redeveloping in the RBOB gasoline and crude oil markets over the last couple of trading sessions and focus on supply tightness during early May, increased price levels may be in store for both ethanol and energy markets.

Even if buyer support remains firm in ethanol markets, the strong production levels and current corn price levels is likely to limit the upside movement of ethanol prices. This would likely leave ethanol prices in a narrow price range through most of the summer.

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

(ES)

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