Recent Biofuels Analysis
Market Commentary: Technical Pressure, Crude Oil Decoupling Drive CBOT Selling
What You Need to Know Today: The USTR says Brazil has committed “unreasonable” acts against global trade rules and is recommending at 25 percent tariff on nearly all Brazilian ag products (unclear whether this includes beef amid President Trump’s effort to lower beef prices)...
Cellulosic Ethanol Fell Short of Expectations, but New Opportunities Are Emerging
Key Takeaways: The Energy Independence and Security Act of 2007 set a goal of producing 16 billion gallons of cellulosic ethanol annually by 2022, but actual production reached only a small fraction of that target. High production costs, feedstock collection challenges, and technological hurdl...
Key Factors that Sparked Brazil’s Growth into an Agricultural Powerhouse
Key Takeaways: Acidity: Brazil’s agricultural production rose significantly after agricultural researchers were able to reduce soil acidity in the Cerrado region. Rotation: Farmers in the Center-West of Brazil, where the Cerrado is located, enjoy a soybean/corn double cropping advantage...
Commodity Policy Being Shaped by Unfolding Farm Crisis
With the war in Iran affecting fuel and fertilizer prices, higher tariffs, weak commodity prices, ag labor constraints, and other factors, farm bankruptcies are now at a 6-year high, a signal of growing stress. During the month of April, 62 Chapter 12 bankruptcies were filed, which is a 1...
Market Commentary: Grains and oilseeds see strength on high PCE reading, Crude oil and macros remain topsy-turvy with U.S.-Iran headline risk
What You Need to Know Today: The U.S. struck Iranian military targets for the second time this week. During a cabinet meeting, President Trump said that the Strait of Hormuz is international waters and will be open to everybody, which appears to be wishful thinking. Control of the Strait...
Brazil’s Emerging Corn Ethanol Industry Driven by Market Forces and Biofuel Policy
Key Takeaways: Brazil has been the second-largest producer of fuel ethanol globally, but almost all of it was derived from sugarcane until recently. Corn ethanol production has increased due to expanded second-crop corn production, sugarcane storage limitations, and biofuel policy. Brazil is e...
CFTC COT Report Analysis
Friday’s CFTC report showed funds reducing net long positions across most of the major ag futures contracts for the second straight week. Funds reduced the all-ags net long by 4,300 contracts (0.4 percent), pulling back from the largest net long since at least 2016 forged just two weeks p...
Soyoil Prices Continue to Be Bullish Amid High Energy Prices and Favorable Biofuel Policy
Key Takeaways: Soyoil futures have been trading at the highest levels since 2022. Higher crude oil prices have allowed biofuels to be more cost-competitive with fossil fuels. Recent U.S. biofuel policy, including 45Z, has been favorable toward soyoil as a feedstock. California will be limiting...
Market Commentary: USDA Slashes Wheat Outlook, Soy Balance Sheet Heavily Yield-Dependent
What You Need to Know Today: Iran says its definition of the Strait of Hormuz is now a “vast operation area” that stretches from Jask to Siri Island. The White House said President Trump did not sign a suspension of the TRQs on beef imports but is “finalizing potential...
Al Gore and the Unidentified Opportunity Costs
Twenty years ago, An Inconvenient Truth helped bring climate risk into the public foreground. Al Gore’s film and book contributed to a transformation in how climate change was understood, moving it from a largely scientific discussion into a broad political and cultural movement. Its infl...
E15: What Does It Mean?
Previous administrations—including that of President Donald Trump—have promoted domestic consumption of corn and soybeans through expanded biofuel mandates and subsidies. The original framework for this policy was the Energy Independence and Security Act of 2007, which required the...
Quick Hits: Ethanol and Biodiesel Margins Update
Ethanol Ethanol production margins continue to experience a counter-seasonal surge, with the energy market rally driving the bulk of the move. Prior to the closure of the Strait of Hormuz in the Persian Gulf, U.S. ethanol margins were already trending above year-ago levels by $0.10-0.20/gallon...
Market Commentary: Technical Pressure, Crude Oil Decoupling Drive CBOT Selling
What You Need to Know Today: The USTR says Brazil has committed “unreasonable” acts against global trade rules and is recommending at 25 percent tariff on nearly all Brazilian ag products (unclear whether this includes beef amid President Trump’s effort to lower beef prices)...
Cellulosic Ethanol Fell Short of Expectations, but New Opportunities Are Emerging
Key Takeaways: The Energy Independence and Security Act of 2007 set a goal of producing 16 billion gallons of cellulosic ethanol annually by 2022, but actual production reached only a small fraction of that target. High production costs, feedstock collection challenges, and technological hurdl...
Key Factors that Sparked Brazil’s Growth into an Agricultural Powerhouse
Key Takeaways: Acidity: Brazil’s agricultural production rose significantly after agricultural researchers were able to reduce soil acidity in the Cerrado region. Rotation: Farmers in the Center-West of Brazil, where the Cerrado is located, enjoy a soybean/corn double cropping advantage...
Commodity Policy Being Shaped by Unfolding Farm Crisis
With the war in Iran affecting fuel and fertilizer prices, higher tariffs, weak commodity prices, ag labor constraints, and other factors, farm bankruptcies are now at a 6-year high, a signal of growing stress. During the month of April, 62 Chapter 12 bankruptcies were filed, which is a 1...
Market Commentary: Grains and oilseeds see strength on high PCE reading, Crude oil and macros remain topsy-turvy with U.S.-Iran headline risk
What You Need to Know Today: The U.S. struck Iranian military targets for the second time this week. During a cabinet meeting, President Trump said that the Strait of Hormuz is international waters and will be open to everybody, which appears to be wishful thinking. Control of the Strait...
Brazil’s Emerging Corn Ethanol Industry Driven by Market Forces and Biofuel Policy
Key Takeaways: Brazil has been the second-largest producer of fuel ethanol globally, but almost all of it was derived from sugarcane until recently. Corn ethanol production has increased due to expanded second-crop corn production, sugarcane storage limitations, and biofuel policy. Brazil is e...
CFTC COT Report Analysis
Friday’s CFTC report showed funds reducing net long positions across most of the major ag futures contracts for the second straight week. Funds reduced the all-ags net long by 4,300 contracts (0.4 percent), pulling back from the largest net long since at least 2016 forged just two weeks p...
Soyoil Prices Continue to Be Bullish Amid High Energy Prices and Favorable Biofuel Policy
Key Takeaways: Soyoil futures have been trading at the highest levels since 2022. Higher crude oil prices have allowed biofuels to be more cost-competitive with fossil fuels. Recent U.S. biofuel policy, including 45Z, has been favorable toward soyoil as a feedstock. California will be limiting...
Market Commentary: USDA Slashes Wheat Outlook, Soy Balance Sheet Heavily Yield-Dependent
What You Need to Know Today: Iran says its definition of the Strait of Hormuz is now a “vast operation area” that stretches from Jask to Siri Island. The White House said President Trump did not sign a suspension of the TRQs on beef imports but is “finalizing potential...
Al Gore and the Unidentified Opportunity Costs
Twenty years ago, An Inconvenient Truth helped bring climate risk into the public foreground. Al Gore’s film and book contributed to a transformation in how climate change was understood, moving it from a largely scientific discussion into a broad political and cultural movement. Its infl...
E15: What Does It Mean?
Previous administrations—including that of President Donald Trump—have promoted domestic consumption of corn and soybeans through expanded biofuel mandates and subsidies. The original framework for this policy was the Energy Independence and Security Act of 2007, which required the...
Quick Hits: Ethanol and Biodiesel Margins Update
Ethanol Ethanol production margins continue to experience a counter-seasonal surge, with the energy market rally driving the bulk of the move. Prior to the closure of the Strait of Hormuz in the Persian Gulf, U.S. ethanol margins were already trending above year-ago levels by $0.10-0.20/gallon...