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Ethanol futures mirror unleaded gas futures not corn

Agriculture.com Staff 05/10/2006 @ 9:44am

Does the price of ethanol affect the corn market or is it on its own? Debating about buying more stocks in ethanol production.

The ethanol futures market has a pattern similar to the unleaded gas futures rather than the corn market. At the present time the price of energy is strong and this will transfer into profits for ethanol plants. The price of corn will be affected more by supply and demand which can be noted in how the corn market is currently trading.

The market basically says we have plenty of corn for now but the market is expecting questionable supplies based on the December 2008 corn futures. Remember the market does not care whether you are profitable on not. The market will eventually come down to if we have enough grain to satisfy market demand.

Does the price of ethanol affect the corn market or is it on its own? Debating about buying more stocks in ethanol production.

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