June 25—As summer progressed, energy markets bounced higher following earlier concerns that the sky was falling in on the world economy. News of any fallout in the European debt crisis was replaced by World Cup drama. With lack of new news, the stock market bounced back above 10,000 points and energy markets regained the seasonal drive, which many thought lost for the year. Since the last update, gasoline futures and retail prices have jumped more than 20 cents per gallon with traders looking at increased driving activity surrounding the Fourth of July holiday weekend. The push for higher demand may come to an end pretty quickly through the middle of July as traditional demand patterns for gasoline shrink significantly through the end of the summer.

Ethanol prices were not so fortunate as to follow the upward price move. Despite flooding in portions of the Corn Belt, weather conditions have been ideal for corn growth. This has weakened corn futures prices and sharply lowered ethanol prices. The price spread between ethanol and gasoline markets is widening again as the prospect for strong ethanol production continues to hold through the end of the year. Ethanol futures are trading 63 cents below the price of RBOB gasoline futures. This spread could continue to widen if corn futures remain under pressure through the summer growing season.