Ethanol
CME / B3
The alcohol that actually trades: corn and sugarcane distilled into fuel, blended into the world's gasoline, and hedged on two continents.
The alcohol that actually trades: corn and sugarcane distilled into fuel, blended into the world's gasoline, and hedged on two continents.
Top Producers
share of 2024 fuel-ethanol production (US DOE AFDC)
Top Consumers
consumption tracks production; ethanol is mostly blended domestically
Main Uses
approximate global split; fuel dominance is highest in the US and Brazil
Top Exporters
approximate; US ethanol exports hit a record near 2.2 billion gallons in 2025 (RFA)
Top Importers
Canada is the largest buyer of US ethanol (approximate)
Can it be a contract?
7 of 8 tests passed
- Written grade spec: passes. A published specification a buyer will accept sight-unseen.Published grade specification
- Fungible: passes. Any lot of the grade substitutes for any other.Any lot substitutes for another
- Dispatchable: passes. Available at the cadence the buyer needs. Storage is only one route to that; generation and continuous flow are others, which is why power trades without being storable.Available on demand from stock or flow
- Delivery point: passes. A point the trade already uses can stand for the market. A contract cannot invent a delivery location; it has to adopt one the physical flows already run through. The clearest proof that a point qualifies is a liquid basis market against it: every other US gas hub quotes as a spread to Henry Hub, every ISO node settles against its hub, and grades quote as differentials to Brent. Where a point has no basis market quoting off it, it is not really the delivery point.Chicago is the reference and other points quote basis to it
- Observable spot price: passes. Somebody publishes or assesses a price the trade recognises.Continuously quoted
- Many on both sides: passes. Enough independent buyers and sellers that no one party sets the price.Many independent buyers and sellers
- Volatility worth hedging: passes. Prices move enough that someone needs to transfer the risk.Moves enough to need hedging
- Enforceable venue: partly. Contracts can be written and enforced where both sides trust the courts. This is separate from the delivery point and often decides it: Russia and Saudi Arabia sit on enormous, long-established physical flows and no forward settles in either, because the flow test passes and the law test does not.Mandates and credits drive the economics
Forward market: Yes
Passes; the tradeable alcohol, with policy the largest single price driver.
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World production
roughly 31 billion gallons
as of 2024
Largest producers
US about 16.2 bn gal (record), Brazil about 9 bn; together about 80 percent
as of 2024
US exports
record of about 2.2 billion gallons
as of 2025
Price band
roughly $1.50 to $2.20 per gallon
as of 2023-2025
Ethanol is the alcohol that genuinely trades as a deep commodity. Global fuel-ethanol production was about 31 billion gallons in 2024, and the United States and Brazil together make roughly 80 percent of it: the US first at a record 16.2 billion gallons from corn, Brazil second at about 9 billion, predominantly from sugarcane with corn ethanol now growing fast. The European Union, China, and a rapidly rising India follow well behind. Beverage spirits, by contrast, have no mainstream futures market, so when alcohol trades as a commodity it means fuel ethanol, not anything drinkable.
Ethanol's job is gasoline blending. The United States blends to E10 almost universally, with E15 growing, under the federal Renewable Fuel Standard; Brazil runs a flex-fuel fleet, about 85 percent of new car sales, on either pure hydrous ethanol or a 27 percent anhydrous blend, switching its sugar mills between making sugar and making ethanol depending on which pays more. India hit a 20 percent blending target in 2025, about five years early. Because ethanol is bulky, it is mostly blended close to where it is made, so production and consumption track each other and net trade is small.
Two exchange contracts anchor the market. The CME Group Chicago Ethanol future, 29,000 gallons cash-settled against Platts terminal quotations, is the main US benchmark, joined by a newer physically delivered contract; Brazil's B3 hydrous ethanol future, 30 cubic metres cash-settled in reais, is the key hedging tool for the Brazilian market. Both are moderately liquid, thinner than the corn and crude majors but real, cleared futures. Prices ran roughly 1.50 to 2.20 dollars per gallon across 2023 to 2025, and the contract trades off corn cost, gasoline prices, and the value of the RIN credits that enforce the US blending mandate.
How It Trades
| Venue | CME Group (US) and B3 (Brazil) |
| Benchmark contract | CME Chicago Ethanol (Platts) future; B3 hydrous ethanol future (ETH) |
| Contract size | 29,000 gallons (CME); 30 cubic metres (B3) |
| Price terms | US dollars per gallon (CME); Brazilian reais per cubic metre (B3) |
| Settlement | CME Chicago Ethanol cash-settled to Platts terminal quotes (a physically delivered 42,000-gallon contract also lists); B3 cash-settled |
| Typical curve | Tracks corn and gasoline; the Brazilian curve reflects the cane harvest and the sugar-versus-ethanol mill switch |
| Liquidity | Moderately liquid, thinner than corn or crude; the B3 hydrous contract is the key Brazilian hedge |
Supply and Demand
Top producers
- United States: a record 16.2 billion gallons, from corn
- Brazil: about 9 billion gallons, mostly sugarcane with corn ethanol rising
- European Union, China, and a fast-rising India
The US and Brazil make about 80 percent of world fuel ethanol. Most is blended domestically, so trade is small relative to output.
Top consumers
- United States (most of its 16+ billion gallons is blended at home)
- Brazil (flex fleet plus a mandatory blend)
- European Union and China
- India (a fast-rising blender to E20)
Major uses
- Fuel: gasoline blending (E10/E15) and Brazilian flex fuel
- Industrial: solvents, chemicals, and sanitizer
- Beverage alcohol, a small slice
What Moves the Price
- Corn price, the dominant US feedstock, at about 2.8 gallons per bushel
- Gasoline and RBOB prices, the blend-value alternative
- RFS mandate volumes and RIN credit values
- The E10 blend wall and E15 expansion
- Brazil's sugar-versus-ethanol production switch
- The dollar and the Brazilian real
Moments That Made the Market
1975
Brazil's Proalcool program launches a sugarcane-ethanol fuel economy after the oil shock.
2003
Brazilian flex-fuel cars arrive and come to dominate new-car sales.
2005-2007
The US Renewable Fuel Standard creates and then expands mandated ethanol blending.
2025
India reaches 20 percent blending about five years early; US ethanol exports hit a record.
What Changed Since the 2010 Era
- India's rapid E20 push became a new global demand engine.
- US ethanol exports hit successive records, led by Canada.
- Corn ethanol grew within Brazil's cane-dominated system.
- The E10 blend wall pushed the US market toward E15.