Source: By Rick Kment, DTN •
Posted: Wednesday, April 5, 2017
After hitting a six-month low the second week of March, April ethanol contracts gained buyer support over the rest of the month as seasonal buying moved into the market. Traders have moved into both ethanol and RBOB gasoline markets over the past several weeks as commercial buying increases ahead of the spring and summer driving season. The current price of gasoline is also likely to spark increased sales and driving activity over the next several months.
Ethanol futures have posted a 10-cent rally since hitting support levels. This has continued to spark additional follow-through buyer activity in not only ethanol markets, but all energy markets through the end of March and early April. This is expected to continue as overall inventory of ethanol and gasoline will likely be drawn down through the next couple of months. Prices are expected to remain moderate during the summer of 2017, but firm buyer support is expected during the spring months in ethanol markets, allowing for strong demand as plant capacity remains steady based on expected relatively stable corn market prices.
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