Reports continue to surface that higher supplies and lower demand is pushing ethanol prices lower. On Tuesday spot ethanol prices in Chicago and the New York Harbor reversed lower from early gains, with the downside driven by weak fundamentals, trade sources said. Rick Kment DTN Analyst reported on Tueaday that, “It just seems that guys are bearish on ethanol with corn likely to get a bit weaker. Production (is) still high; demand (is) still OK but not great … looks like it’s trying to break out downward. We have been range trading for quite a bit of time now.”
Demand is also weaker writes energy analyst George Orwel, “Aside from pressure from selling in the corn and oil markets on Monday, cash ethanol prices are moving lower in early trade on weakening demand, with buyers stepping to the sidelines.” Other sources indicate the market will remain soft for some time, “It’s awfully bad everywhere,” said one broker. “Buyers aren’t there. Something’s got to break because the spread is not working,” added another broker. A source projected on Friday that we could see a steep drop in ethanol prices because there are “a lot of unsold stocks.”