WASHINGTON, D.C. (RFD NEWS) — Farm groups are weighing in on the latest move from the Environmental Protection Agency that gives both refiners and farmers something to like.
The EPA granted 29 full or partial small refinery exemptions, totaling 1.76 billion biofuel credits. That is significantly more than the 990 million credits initially expected, a move farm groups say is concerning.
However, the agency says it will put the difference back into future blending requirements, which could help protect demand for biodiesel and soybean oil.
Farmers React to Refinery Exemptions, Maintaining Biofuel Demand
The American Soybean Association says maintaining that demand is critical as farmers head into harvest. The announcement comes as President Trump is set to meet with refiners at the White House to discuss ways to lower fuel prices for families.
USDA Deputy Secretary Stephen Vaden called the move a win for American farmers in a post on X, saying, “...a win for American farmers, ensuring increased demand for corn and soybeans continues.... this Administration’s EPA is the only to have reallocated waived volumes.”
In Illinois, corn growers are also focused on demand, saying ethanol exports have played — and will continue to play — a key role.
Collin Watters says domestic ethanol demand has remained consistent, while foreign demand has helped absorb surplus production.
“We’ve had very consistent, stable domestic demand. Ethanol is still growing slightly, and a lot of that has to do with foreign demand for U.S. ethanol. Our domestic ethanol consumption peaked back in 2019, so we’ve been coming off of that for a while now, so really the export market’s kind of absorbing a lot of that surplus you could say. I definitely would love to see more domestic demand, but it’s kind of at a balancing point right now, and a lot of that is policy driven.”
Watters says growers in his area have also faced a challenging growing season, with needed rains coming too late for some fields.
“The pollination period was pretty hot and pretty dry. Those nighttime temps stayed high too, so I think we lost some yield during pollination. What I had hoped is that maybe some of that rainfall would help grain fill, but it almost feels like it might have been just too much rain at the time.”
Crop Progress: Soybeans Rally as Farmers Head into Harvest
As farmers prepare for fall harvest, commodity markets are showing signs of strength, with soybean prices reaching new contract highs.
Lewis Williamson with HTS Commodities joined us on Tuesday’s Market Day Report to review the latest USDA Crop Progress data.
In his interview with RFD News, Williamson says producers are feeling more optimistic as soybean prices move higher, following a period of lower prices that benefited livestock producers and other buyers.
“We see new contract highs,” Williamson said. “So it’s good. The farmer’s smiling.”
Williamson pointed to strong demand across several markets, including soybean crush margins, ethanol production and exports.
He also noted that crop conditions are drawing attention as the market heads into September. Some states are reporting particularly low good-to-excellent ratings, including North Dakota at 24% and North Carolina at 25%.
Weather Adds Market Pressure
Weather remains another major factor heading into harvest, with extreme heat and dryness creating stress for crops in parts of the country.
Williamson said temperatures around Memphis are expected to reach 100 degrees, putting additional pressure on crops.
The situation could be particularly significant for the more than 6 million acres of double-crop soybeans planted across the United States.
At the same time, Williamson said the market is being supported by strong demand.
Soybean crush margins remain positive, ethanol grinding is strong and the export market is robust, all contributing to the recent rally.
However, Williamson cautioned that commodity prices cannot continue moving higher indefinitely.
“Trees don’t grow to the sky,” he said, warning that pullbacks will eventually occur even as the market remains strong.
Trade Tensions Add Uncertainty
Trade policy remains another major concern for agriculture, particularly as tensions between the United States and Canada continue.
Williamson said the flow of Canadian canola oil into the United States is something to watch as discussions surrounding the USMCA and tariffs continue.
He also pointed to developments with China, where soybean purchases by Chinese buyers continue.
USDA recently announced another purchase of roughly 136,000 metric tons of U.S. soybeans, according to Williamson.
He said China appears to be taking a friendlier approach toward the United States and could be working to fulfill a previously discussed commitment to purchase 25 million metric tons of U.S. agricultural products.
Williamson said additional purchases of corn and wheat could also come ahead of an upcoming U.S.-China meeting.
With weather, exports, crop conditions and trade policy all influencing the market, Williamson says farmers are entering harvest season with a more positive outlook—but plenty of factors remain in play.
Corn Basis Weakens Across Eastern Corn Belt
Over the last month, corn basis has fallen across the Eastern Corn Belt.
Ag economist Josh Strine says some areas have been harder hit than others.
“Basis weakened the most in southeast Indiana, where it fell by 27 cents per bushel to reach negative 32 cents. That is the weakest basis in the district for this time of year since the 2009-2010 crop year. Sharp declines extended across the southern parts of Indiana, Illinois, and Ohio, consistent with the 20-cent-per-bushel decrease in basis along the Ohio River.”
On the soybean side, Strine says the crop saw stronger basis numbers.
“Turning to soybeans, basis in 17 crop reporting districts strengthened and 23 weakened. The largest move came out of Iowa. West Central and Southwest Iowa each gained 24 cents per bushel, ending the period with cash prices above futures. Several western Iowa districts recorded their highest basis levels for this time of year in over a decade. The Iowa soybean processor market amplified this trend. Basis increased by 41 cents per bushel to positive 43 cents per bushel.”
Strine says the soybean basis map looks a lot different from July, with most soybean gains scattered outside of Iowa.
