Ethanol Futures

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Here is a story from Bloomberg on ethanol futures: http://www.bloomberg.com/news/2011-03-25/ethanol-futures-decline-as-corn-falls-on-global-demand-concern.html

The March 25, 2011 article begins:

Ethanol futures declined in Chicago as corn dropped on concern global demand for the grain may wane.

The grain-based additive followed corn lower on speculation consumption from Japan could suffer as the country battled to avoid a meltdown at its Fukushima plant and as unrest swept across the Middle East and Africa. Ethanol is made from corn in the U.S.

“Ethanol was hampered by the volatility in corn, particularly in the physical markets, with both sides of the market unable to stick to numbers as prices whipped around,” analysts at SCB & Associates LLC wrote in a note to clients.

Look above at the Commodity Futures Trading commission (CFTC) "Commitment of Traders" (COT)report has to say. Talk about a thin market? One can only infer those traders have a lot of pull in Washington D.C.

Good News - Maybe

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The Commodity Futures Trading Commission (CFTC) regularly publishes its "Commitment of Traders" (COT) report.

Above shows the most recent data for Class III milk futures. Notice the headings. Non - commercial means, for the most part, speculators. Now notice the "shorts" are running away. This likely means prices are going to improve.

Next, notice the total number of traders. No sane person would call this a real market. However, most of the experts are recommending "risk management" which means beware once again of a thin, thin market.