Ethanol Market Update - 1/5/26

Overview

Market Overview

Ethanol futures softened modestly to start the new year, with values edging lower across the curve following last week’s year-end rebound. Trade remained light, reflecting thin holiday liquidity and limited commercial urgency as participants ease back into the market.

The front of the curve continues to grind sideways, with nearby values holding within a narrow range as seasonal demand remains muted and production stays steady. While there is no sign of stress in the market, upside momentum remains limited absent a material shift in blending economics or export demand.

Overall price action remains orderly, with declines shallow and broadly distributed across the forward curve.

Production Update

U.S. ethanol production remains stable coming out of the holiday period. Liquidity Energy’s internal model continues to show output holding near recent averages, with no widespread disruptions reported.

• Estimated Production: ~1.12–1.13 MMbpd

• Utilization: ~76–77%

• Operating Environment: Stable, seasonal slowdown largely complete

Plants appear well positioned heading into mid-January, with margins supported by manageable corn costs and steady coproduct values. Any near-term production changes are expected to be incremental rather than structural.

Futures & Curve Structure

Chicago Ethanol (Platts) – Jan 2 Settlements

Estimated Volume: 917
Total Open Interest: 37,840

The curve remains modestly backward through mid-2026, though the structure continues to flatten. Q1 values remain under mild pressure relative to Q2, reflecting adequate nearby supply and limited prompt demand urgency.

Market Insight

The ethanol market enters January in a familiar holding pattern — steady production, balanced inventories, and limited near-term catalysts. While futures have eased slightly, the absence of aggressive selling suggests the market is comfortable at current levels.

Commercial interest remains largely spread-focused, with most activity concentrated in the front half of the curve. End users appear well covered, while producers continue to show discipline in forward sales.

Absent a change in export flows or a surprise shift in blending economics, near-term trade is likely to remain rangebound and technical in nature.

Summary

Ethanol futures began the new year slightly softer, with Jan 26 settling at $1.5825 and small losses extending across the curve. Production remains steady, liquidity is improving post-holiday, and spreads suggest a well-balanced market.

As January progresses, attention will shift toward post-holiday demand normalization, export activity, and any early-year adjustments in run rates.

The broader tone remains stable — quiet, orderly, and waiting for direction.

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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