Brazilian Exit of Biofuel Plant a Setback for Ethanol Futures Market

Ethanol futures may be in for a setback as Archer Daniels Midland sold their Brazil ethanol plant and is mulling the selling of their three US ethanol plants. Ethanol futures are up 42 points this week near $1.50 per gallon on the Chicago Board of Trade. The agri-industry giant claims the business environment is in a “challenging” time for the biofuel, however, at one time the company was considered the leading champion of biofuels. Another reason, ADM cites, for closing down their Brazil ethanol plant is that they didn’t see their long-term objectives for their company, and their shareholders, being met. “If ADM is selling their biofuel ethanol plants, it may be a turning point in the ethanol (futures) market,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, sharing her fundamental assessment of the ethanol futures market. Taylor added, “With all of the bad press with ethanol and the EPA – as well as the public – the writing may be on the wall for the long-term use of ethanol products.” Ethanol futures have been in a tight sideways trading pattern for the past two years with a slight bias upward. With an agriculture giant such as Archer Daniels Midland looking to bow-out of the business, I am quite sure the ethanol futures market is watching the developments of this transaction closely. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR...

Brazil’s Focus on Cane for Ethanol Lifts Sugar Futures

Sugar futures has been supported for the past two sessions as it has been reported Brazilian mills are losing ground against ethanol in the duel over sugar cane. Sugar futures are trading “unchanged” today settling near .1471 cents per pound at the InterContinental Exchange in London. A Brazilian sugar-cane group reportedly released data showing sugar mills diverting just over 42% of their cane for the dedication of sugar rather than ethanol in the latter part of last month. The bullish aspect is that with more cane processed than anticipated for ethanol use, it is the fact that the need of sugar for food is outweighing the need for fuel (on the futures charts). Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the sugar futures market by stating, “The need for actual sugar does indeed compete with motor fuel in one of the biggest sugar producing nations in the world.” Plotkin added, “If the demand for ethanol fuel is extra high in the Southern Hemisphere, this could create a bullish market for sugar (futures) indeed.” The technical trend for sugar remains “up,” but is somewhat at a crossroad. Sugar futures is testing its recent highs while the volatility is picking-up at these high levels. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL...

Corn Futures Relief Rally at a Crossroads

Corn futures have bounced back over .20c from their recent lows, but the outlook for the grain remains uncertain with other factors involved. Corn futures are currently at $3.85 per bushel (as of this writing) at the Chicago Board of Trade, up .015 cents from yesterday’s close. For the time being, the US Dollar is providing meager support being down just more than one-half percent – a lower dollar provides more buying leverage for importers. However, despite this recent “relief rally” in the corn market, corn remains vulnerable due to dwindling support of ethanol-based fuel, and with ample supplies we could even see further drops in gasoline prices as well. “It seems not only are corn futures influenced by weather, but politically influenced as well,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current corn futures situation. Riordan added, “The ethanol mandate has the ability to send corn futures lower as well as the strong dollar we are seeing.” Corn futures trend is down with no clear bottom yet in sight. I am looking for a way into the short side of this market soon – hopefully my patience with corn futures will pay-off. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL...