During the last half of June, ethanol futures have tumbled more than 10 cents lower, falling below $1.50 per gallon since the third week of May. This lack of support in the ethanol market comes after a consistent two-week selloff that has left traders without a break in order to take protection or cover positions.
The losses in the ethanol futures market come as corn prices have fallen 22 cents per bushel in the same time, moving step-in-step with moves in the ethanol market. Even though the relationship between the ethanol and RBOB gasoline market is much less defined than the ethanol and corn market at this point, the RBOB gasoline market has falling more than 20 cents per gallon in the last month also, but moves in this market have been much more jagged and typical of a normal futures trading chart.
The overall steady pressure seen through early summer consistently focuses on liquidating positions and aggressive price losses. This may continue to push prices lower over the near future and keep many traders from stepping back into the market based on follow through liquidation.
Rick Kment can be reached at firstname.lastname@example.org
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