Ethanol Concerns Affect Corn Market
The drop in energy prices will be good for fuel bills, but there is reason to worry about what that might mean for ethanol in farm country. Here’s Standard Grain’s Joe Vaclavik.
Vaclavik… “There's going to be reduced demand for gasoline. Unleaded gasoline tumbled to an all time low of 67 cents per gallon in the futures market yesterday. Ethanol futures tumbled to a low of $1.03 per gallon, which I think is a record low for the ethanol futures contract as well. So the markets are pricing in sharply reduced demand for gasoline and therefore ethanol. So I guess the argument can be made that you're going to see reduced demand for corn via the ethanol industry as a result. The hope here would be that this is short lived. That we see a big recovery out of this virus deal. The fear is that this virus deal lasts much longer than people would like it to. And that we see a real tangible decline in ethanol production and, and demand for corn as a result.”
Those ethanol concerns weren’t good for the corn market, down $0.10 ½ to $3.44.
Chicago May Wheat futures yesterday closed up a penny and a quarter to $4.99 ¼.
Live Cattle bounced back, up $4.50 putting the April board at $96.35. Feeder Cattle up as well $2.77 ½ to $110.87 ½.
Class III milk dropped a penny to $15.99.