Ethanol prices supported by stable corn prices

Despite the focus on potential record corn production this growing season, corn futures are showing an amazing sense of stability at the end of August. This is creating the potential for light to moderate buyer support to step into the complex and prices are slowly moving higher from market lows, which developed in early August.

Ethanol prices have seen similar gains, rallying 14 cents per gallon off lows set the first week of August. However, gains are not expected to be strong and may be held in check by slowing demand following Labor Day weekend. Current buyer interest remains stable as ethanol production is expected to remain strong, while supplies could deviate in a moderate range through the fall months. The outlook for ethanol markets continues to be driven by longer-term corn prices, due to healthy production plant margins, and the expectation that continued economic growth will help sustain and stabilize gasoline demand and ethanol blending activity heading into 2015.