Ethanol Market Update - 1/13/26

Overview

Market Overview

Ethanol futures sold off sharply Monday, posting broad-based losses across the curve as the market unwound last week’s rebound and reset lower on macro pressure and renewed selling interest. The move was decisive, with nearly every contract settling 4.0¢ lower, signaling a coordinated repricing rather than isolated front-end weakness.

The front half of the curve bore the brunt of the move, as nearby demand remains functional but unurgent. End users appear comfortable with coverage at current levels, while producers showed limited appetite to defend prior highs following last week’s rally failure.

Production Update

U.S. ethanol production remains steady, with no material operational disruptions reported. Liquidity Energy’s internal model continues to show output holding near recent averages, supported by stable run rates and manageable input costs.

• Estimated Production: ~1.12–1.13 MMbpd

• Utilization: ~76–77%

• Operating Environment: Stable, seasonal norms intact

Production discipline remains intact, but current output levels are sufficient to meet demand, reinforcing the softer tone across the curve.

Futures & Curve Structure

Chicago Ethanol (Platts) – January 12 Settlements

Curve Metrics

• Q1 Avg: ~1.57

• Q2 Avg: ~1.64

• 1H Avg: ~1.61

The curve remains modestly backward, but spreads flattened materially as the market repriced lower across all tenors.

Market Insight

Monday’s selloff appears driven by a combination of macro risk-off sentiment and a lack of follow-through buying after last week’s bounce. With no new bullish catalysts on the horizon and export demand steady rather than accelerating, the market reverted back toward the lower end of its January trading range.

Volume remained healthy, particularly in February and March, suggesting the move was broadly participated rather than thinly traded. Open interest ticked higher in several contracts, reinforcing the idea that new positioning—not just liquidation—was involved.

Cash Market Tone

Cash markets followed futures lower but remained orderly. No dislocations were observed across Argo or NYH, with basis largely unchanged relative to futures.

• Argo: Tracking futures; values softened in line with CU

• NYH: Premiums remain stable, reflecting balanced East Coast supply

• ITT: Continued to mirror NYH with no abnormal spread movement

Technical Perspective

The front-month break puts ethanol futures back below recent support levels, reopening downside risk toward the $1.53–$1.55 area in January. Resistance now shifts to $1.60–$1.62, which will need to be reclaimed to stabilize sentiment.

Momentum has turned neutral-to-bearish in the near term, with trade likely to remain range-bound unless a fresh demand or export catalyst emerges.

Summary

Ethanol futures posted a sharp reset lower Monday, with nearly the entire curve settling 4.0¢ lower. Production remains steady, cash markets are balanced, and the curve continues to flatten as near-term demand remains adequate but unaggressive.

Absent a material shift in fundamentals, the market appears poised for consolidation near the lower end of the recent range, with spreads and technical levels driving near-term trade.

Technicals

Enjoyed this article?

Subscribe to never miss an issue. Daily updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Daily Market Update

Natural Gas Daily Update

Fuel and Freight Daily Report

Disclaimer

The Coolidge Report is published by Coolidge Shop LLC and is intended for informational purposes only. This report does not constitute trading recommendations, financial advice, or an offer to buy or sell any commodity. While efforts are made to ensure accuracy, Coolidge Shop LLC makes no warranties regarding completeness or reliability. Coolidge Shop LLC is not registered as a Commodity Trading Advisor (CTA) with the CFTC, and this report should not be interpreted as a solicitation to engage in futures or derivatives trading.

This article and its contents are provided by Liquidity Energy, LLC ("The Firm") for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC