Ethanol Market Update - 1/14/26

Overview

Market Overview

Ethanol futures extended losses Tuesday, with the curve settling another 1.0–1.5¢ lower across most tenors as selling pressure persisted into midweek. While the pace of the decline slowed compared to Monday’s sharp reset, the market remains firmly defensive, with limited buying interest emerging at current levels.

The front end continues to lead the move lower as nearby demand remains steady but lacks urgency. End users appear well covered, while producers continue to allow futures to drift rather than aggressively defend price levels.

Volume & Positioning

• Estimated Volume: 2,803 contracts

• Prior Day Open Interest: 34,399 contracts

Volume moderated from earlier in the week but remained healthy, particularly in February and March. Open interest declined modestly, suggesting a mix of liquidation and cautious repositioning rather than aggressive new short buildup.

Production Update

U.S. ethanol production remains stable, with Liquidity Energy’s internal model showing no meaningful deviation from recent averages. Operating conditions remain supportive, though output continues to exceed seasonal demand growth.

• Estimated Production: ~1.12–1.13 MMbpd

• Utilization: ~76–77%

• Plant Operations: Stable, no widespread outages reported

Absent weather disruptions or margin pressure, production is expected to remain steady in the near term.

Futures & Curve Structure

Chicago Ethanol (Platts) – January 13 Settlements

Curve Averages

• Q1 Avg: ~1.56

• Q2 Avg: ~1.62

• 1H Avg: ~1.59

The curve remains backward but continues to flatten, with front-month weakness compressing spreads and signaling adequate nearby supply.

Market Insight

Tuesday’s follow-through selling reinforces the idea that last week’s rally was corrective rather than structural. With export demand steady but not accelerating and blending economics capped seasonally, futures continue to search for support.

The lack of sharp dislocations in cash markets suggests the move is largely futures-driven, tied to macro sentiment and positioning rather than a deterioration in physical fundamentals.

Cash Market Tone

Cash ethanol markets softened in line with futures but remained orderly:

• Argo: Values tracked CU lower with no abnormal basis shifts

• NYH: Premiums held steady, reflecting balanced East Coast logistics

• ITT: Continued to mirror NYH pricing with stable differentials

No stress was observed across regional cash markets.

Technical Perspective

January futures are now testing the $1.54–$1.55 zone, which represents near-term technical support. A sustained break below this area could open the door toward the low $1.50s, while resistance is now defined at $1.58–$1.60.

Momentum remains mildly bearish, though selling pressure has slowed relative to earlier sessions.

Summary

Ethanol futures extended their decline Tuesday, with most of the curve settling 1.5¢ lower as the market continues to recalibrate following last week’s failed rebound. Production remains steady, cash markets are balanced, and the curve continues to flatten under modest demand conditions.

Near-term trade is likely to remain technical and range-driven, with attention focused on whether the front end can establish support near current levels.

Technicals

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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.

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