Ethanol futures posted slight to moderate losses Monday as traders focused on rebounding energy and grain markets. Front month March contracts closed at $1.757 per gallon, after a 0.8-cent per gallon increase. The renewed support in commodity markets, despite stock market weakness, created moderate support in the ethanol complex. Other nearby contracts rose 1 to 1.4 cents per gallon, with overall support coming from longer-term demand expectations.
RBOB gasoline futures posted slight gains early in the week, with moderate commercial and noncommercial buying trickling into the market. Even though traders remain slightly optimistic, most buyers are cautious and unwilling to aggressively go after long term supplies, given the recent volatility in the market and uncertainty of global markets. Front month contracts posted gains of 0.76 cents per gallon, to close at $1.894 per gallon, while other nearby contracts posted gains just over 1 cent per gallon.
Crude oil futures bounced moderately higher in light supporting trade. March contracts rallied 70 cents per barrel with other nearby contacts increasing 81 cents per gallon. The light support in the market follows the sharp market sell-off seen last week, although there is still significant hesitancy for traders to become too aggressive.
Ethanol spot prices were steady to sharply lower, following the softness of production margins during the last two weeks. Buying activity remained lackluster, which created intense pressure for sellers to drop price levels significantly to get anyone interested in the market. Midwest prices were unchanged, while prices in the Gulf Coast and East Coast fell 3.5 to 6.5 cents per gallon.
Rack ethanol prices fell Monday, with the national average rack price down 1.62 cents per gallon. Prices through the Midwest fell 1 to 3 cents per gallon, with more significant losses falling 4 to 8 cents per gallon. National average prices were listed at $2.0245 per gallon.
Ethanol plant profitability levels fell 3 cents per gallon, following renewed buying support in the corn futures market and more intense support in cash prices through South Dakota. Neeley Biofuels posted a 19.3-cent per gallon net profit Monday. The purpose of the hypothetical plant is to measure the effect of changing commodity prices on plant margins.
