Despite upcoming seasonal demand support, prices turn lower

During the last half of April, aggressive pressure developed in ethanol and RBOB gasoline futures trade. At the time of this writing, RBOB gasoline futures had fallen 20 cents per gallon since hitting market highs during the middle of April. This continued to increase overall wide market pressure at a time when support traditionally builds as summer driving demand starts to take hold. Prices should be solidifying, not moving lows not seen since fall of 2016. The focus on growing supplies and global trade concerns is creating some buyer uncertainty in the ethanol complex, too. Ethanol prices have not tumbled as drastically as RBOB gasoline, dropping just 10 cents per gallon in the same period. Current ethanol prices within one penny of gasoline give very little discount for blending based on price spreads between products. Corn prices are expected to remain stable through most of the spring and summer, leaving production costs low, and making ethanol competitive with other energy prices heading into the summer months.