Ethanol Market Update - 1/26/26

Overview

Market Overview

Ethanol futures started the week on firmer footing, building on Friday’s strength as values across the curve pushed modestly higher. CU February settled at $1.610, up 1.0¢ on the day, while gains extended steadily through the balance of 2026. The move reflects continued stabilization following last week’s volatility, with improved sentiment returning to the front half of the curve.

Trade volume was solid for a Friday session, totaling 4,883 contracts, while open interest increased to 40,327, suggesting renewed participation rather than short-covering alone. The curve remains backward through mid-2026, though spreads have tightened slightly as near-term downside pressure eases.

Production Overview

U.S. ethanol production remains steady heading into late January. Liquidity Energy’s internal production model shows output largely unchanged from prior weeks, with plants continuing to operate at consistent utilization rates.

• Estimated Production: ~1.13 MMbpd

• Utilization: ~76–77%

• Operating Conditions: Stable; no widespread outages reported

Margins remain workable despite softer flat prices, supported by manageable corn costs and stable coproduct values. Seasonal demand remains the limiting factor, but production discipline continues to prevent material oversupply.

Futures & Curve Structure

Chicago Ethanol (Platts) – Settlements from 1/23

The curve remains modestly backward, with nearby months maintaining a premium over deferred values. Strength was most pronounced in the front half of the curve, signaling improved confidence in near-term demand and supply balance.

Market Insight

Friday’s advance appears to be a consolidation-driven move rather than a fundamental shift. End users remain covered, but producer selling has slowed at these levels, allowing prices to stabilize. Export demand remains steady, providing a floor beneath the market, while domestic blending economics continue to cap aggressive upside.

With production steady and inventories manageable, ethanol futures are likely to remain rangebound, trading in response to spreads, corn movement, and broader energy sentiment rather than any single catalyst.

Summary

Ethanol futures closed last week higher, with CU Feb settling at $1.610, extending gains across the 2026 curve. Production remains steady near 1.13 MMbpd, and open interest continues to build, pointing to a more balanced and orderly market.

As the market moves deeper into late January, attention will remain on export flows, corn price direction, and any shifts in producer run rates that could alter the near-term supply picture.

Technicals

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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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