Ethanol Market Update - 12/30/25

Overview

Market Overview

Ethanol futures weakened Tuesday as the market resumed post-holiday trading with a softer tone across the curve. Selling pressure was concentrated in the front half of 2026, with nearly all deferred months settling 1.5¢ lower on the day, reflecting thin liquidity, limited year-end participation, and ongoing seasonal demand headwinds.

January traded at $1.58, down 1.0¢, while February settled at $1.60, off 1.25¢. The curve remains modestly backward in the near term but continues to flatten into mid-2026 as prompt demand remains steady but unremarkable. With most commercial players already positioned into year-end, price discovery remains technical and volume-driven.

Total estimated volume reached 1,103 contracts, with open interest at 37,064, underscoring the holiday-thinned environment and limited speculative engagement.

Production Update

U.S. ethanol production remains steady into the final days of the year. Liquidity Energy’s internal model shows output holding near recent averages, supported by stable plant operations and manageable input economics.

• Estimated Production: ~1.12–1.13 MMbpd

• Utilization: ~76–77%

• Operating Conditions: Stable, with no material outages reported

With the calendar turning and holiday blending largely behind the market, production is expected to remain flat near-term, barring any weather-related disruptions or logistical issues.

Futures & Curve Structure

Ethanol CU – 12/30 Settlements

Curve Metrics

• Q1 Avg: ~1.59

• Q2 Avg: ~1.67

• 1H Avg: ~1.63

The curve remains backward in the front months but continues to compress as deferred values soften alongside prompt contracts.

Market Insight

Price action remains driven more by calendar mechanics than fundamentals. End users appear well covered, while producers have shown little urgency to add forward hedges at current levels. The lack of volume has exaggerated small directional moves, keeping spreads under mild pressure.

Absent a shift in export demand, a change in blending economics, or a production surprise, near-term trade is expected to remain rangebound and technically driven through year-end and into early January.

Summary

Ethanol futures closed lower Tuesday with January settling at $1.58, as post-holiday liquidity and seasonal demand pressures weighed on the curve. Production remains steady, cash markets are orderly, and the forward structure continues to flatten.

With limited participation and year-end positioning largely complete, the market is likely to remain quiet into the final sessions of 2025, with attention turning toward January demand signals and early-year blending economics.

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