Bloomberg News

Morgan Stanley Says Buy October Ethanol Contracts, Sell December

July 20, 2012

Morgan Stanley recommended buying October ethanol contracts while selling December as higher prices are required to encourage production amid rising corn.

“We see ethanol prices needing to move higher to keep producers motivated in light of rising corn prices,” Hussein Allidina, a New York-based analyst at the bank, wrote in a July 19 report. The spread between October and December ethanol prices was 6 cents a gallon, according to the report. The bank recommends taking profit when it reaches 15 cents.

To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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