Ethanol futures have continued to struggle to find any sense of support through the last couple months with prices moving at support levels set during early December due to price pressure Monday.
This overall lack of support is focused on the inability to hold corn prices higher, but also on the strong production levels of ethanol seen in the last several weeks and slowing blending demand is likely to break through long-term pressure.
Current prices are just 1 cent per gallon above the long-term support level of $1.308 per gallon set in early 2016. The expectation that these price levels will be shattered is likely to keep markets bearish over the next few weeks. If front-month futures break through the $1.30-per-gallon level, the next market low would have been set when ethanol futures were first established in 2005. This underlying pressure may continue to keep buyers absent from the market for quite a while.
Rick Kment can be reached at email@example.com
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