March 26—Ethanol prices continued to erode through the middle of February as corn futures prices moved significantly lower due to lack of investment trader interest, and energy markets suffered due to lack of upward movement in the economy. The Dow Jones Industrial Average recently dropped below 10,000 for the first time in 2010. News of other global debt and solvency issues remains on the front of most traders' minds. In the past month, prices of gasoline have fallen nearly 20 cents per gallon, but the outlook on the economy has not used this price decline to increase demand. The long, cold winter season, relentless for most of the country, seems to be dragging on forever, limiting travel for many consumers. The outlook for gasoline demand remains strong heading into the summer months with RBOB gasoline futures currently posting significant premiums in deferred contract months. This means that traders are willing to push off buying activity until later when they expect demand to be better.

Ethanol contracts remain cautious at best with traders following the weakness in the corn market as well as lower gasoline prices. The expectation of higher demand for gasoline through the late spring and summer months is helping to uphold ethanol demand expectations, but right now there is ample product available and demand is sluggish through most regions of the country. EP