Ethanol Market Update - 10/23/25

Overview

Overview

Ethanol futures firmed modestly on Wednesday, with the CU contract settling at $1.845, while Q4 averaged $1.765, maintaining a 12.75¢ premium to Q1.
The complex continues to trade within a steady backwardation, supported by resilient production levels and moderate blending demand.

Model projects EIA ethanol production at 1.118 million barrels per day, a slight decline of –3,000 b/d (–0.3%) from last week’s actual 1.121M b/d. Utilization remains robust near 75.2%, reflecting stable Midwest plant operations and minimal downtime across major producers.

Production Metrics:

• Daily Output: ~434,000 MMBTU

• 7-Day Average: ~434,600 MMBTU

• Utilization: 75.2%

• Largest Gain: POET – Hanlontown

• Largest Drop: Green Plains – York

Market Insight

Futures spreads remain seasonally firm but slightly narrowed across the forward curve:

• Oct/Nov: +8.0¢

• Nov/Dec: +8.0¢

• Q4/Q1: +12.75¢

Cash prices were steady, with limited volatility midweek:

• Argo Nov: $1.805 (+8¢ vs Dec)

• NYH Nov: $1.955 (+8¢ vs Dec)

• ITT Oct: $1.955 (+11¢ vs CU)

• R11 Prompt: $1.9325 TWS / $1.9625 NWS

Despite steady run rates, inventories remain manageable, with ongoing exports keeping Midwest terminal levels balanced.
Basis values at key blending hubs continue to reflect strong nearby fundamentals despite easing gasoline cracks.

EIA Production Estimate

Incorporating regional throughput, recent MMBTU data, and conversion adjustments — produces the following estimate:

📊 EIA Production Estimate: 1.118 million barrels per day
📉 Change: –3,000 b/d (–0.3%) from last week’s 1.121M
⚙️ Utilization: 75.2%
🔥 Daily Output: ~434,000 MMBTU

The data suggests output remains near capacity levels, with only minor efficiency variations week-to-week.

Futures & Cash Settlements – 10/22

Ethanol CU Contract

Q4: 1.765 | Q1: 1.6375 | Q2: 1.7025 | 1H: 1.670
Q4/Q1: +0.1275 | Q1/Q2: –0.065

EZ/CU Contract

Argo Market

NYH Market

ITT Contract

R11 Prompt

• TWS: $1.9325

• NWS: $1.9625

Technicals

The CU curve remains stable with light consolidation between $1.76–$1.85, as RSI flattens near 49. Momentum indicators suggest limited directional bias into the week’s end.

Support remains at $1.73 (Nov), with resistance near $1.86 (Oct).
Deferred spreads continue to compress slightly, consistent with seasonal normalization ahead of Q1 2026.

Summary

Ethanol futures remain steady within a defined range, as production levels hover near capacity and blending demand supports late-year firmness.
Liquidity Energy’s model indicates a minor dip in weekly EIA output to 1.118M b/d, keeping utilization in the mid-70s.
The market tone remains stable, with Q4 holding a strong 12.75¢ premium to Q1, reflecting balanced near-term supply-demand conditions.

Technicals

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