Viewpoint: US policy shift elevates domestic feedstocks

Spanish Market: Agriculture, Biofuels
02/01/26

US biofuel producers may increasingly turn to domestic feedstocks as restrictive biofuel and trade policies limit the use of foreign materials.

The clean fuel production tax credit, known as 45Z, launched in 2025 to replace the $1/USG blender's tax credit. Under 45Z, foreign used cooking oil (UCO) became ineligible for credits, while foreign tallow retained access until tariffs introduced in the third quarter disrupted trade. Starting in 2026, 45Z will apply exclusively to biofuels made from North American feedstocks, effectively excluding all other foreign products.

President Donald Trump's administration's push to curb imports aims to strengthen domestic feedstocks, particularly soybean oil, in US biofuel production. US soybean crush capacity has grown by 13pc since 2022, reaching 2.97bn bushels (bu)/yr with the addition of 10 new crush plants. Expanded capacity drove a record 227.6mn bu of soybean crush in October, with multiple monthly records set throughout 2025.

The US biodiesel sector continues to rely on soybean oil as its primary feedstock, with soybean oil accounting for roughly 70pc of the biodiesel feedstock mix in 2024. Meanwhile, the renewable diesel (RD) and sustainable aviation fuel (SAF) industries have increasingly targeted lower-carbon feedstocks to maximize credit value, resulting in soybean oil demand failing to meet the demand expectations of crushers.

Agricultural lobbyists have long blamed foreign feedstocks for displacing domestic crop-based materials and have consistently pushed for restrictions. Heavy imports since early 2023 sidelined domestic supply, with Chinese UCO flooding the market and Brazilian and Australian tallow following suit. This surge drove record-high UCO consumption in July 2024, while tallow hit its own record in July 2025.

Feedstock imports slowed in the second half of 2025 with new 45Z rules and import tariffs. Chinese UCO shipments in January-October 2025 fell by 65pc from a year earlier, while Brazilian tallow volumes plunged below 22mn lbs in the fourth quarter after 50pc tariffs were imposed in August, down from a record 154mn lbs in June. Australian tallow maintained strong flows until October despite 10pc tariffs, but volumes were expected to decline in late 2025 and beyond as 45Z restrictions take effect.

In June, the Environmental Protection Agency (EPA) proposed record-high blending requirements for 2026 and 2027, alongside a measure to halve Renewable Identification Number (RIN) credit generation for fuels made abroad or from foreign feedstocks. This proposal sparked a rally in domestic feedstock prices, with most categories hitting yearly highs in July.

Agricultural lobbyists and waste-based feedstock suppliers support these RIN changes, viewing them as a boost for domestic feedstock demand. But optimism for domestic feedstocks is tempered by uncertainty surrounding the 45Z credit and delays in biofuel mandates, which are expected to extend into 2026.

The Trump administration confirmed in December that mandates would not be finalized before year-end, leaving market players without guidance about final mandatory volumes and potential import RIN credit cuts. Also in December, the US Department of the Treasury submitted a new 45Z proposal to the White House, as market participants seek updated guidance on filing tax credit claims for 2025, though officials will likely permit the use of existing guidance for 2025 claims.

This lack of clarity has triggered production cuts across multiple RD plants nationwide. Biofuel refiners such as Phillips 66 and Diamond Green Diesel have publicly announced rate reductions as renewable diesel margins dipped below 2024 levels. Some refiners continued tapping foreign feedstocks until December, avoiding some tariffs by claiming duty drawbacks and exporting the finished fuel abroad. Others remain cautious, as the half-RIN provision, if finalized, poses a significant risk to margins.

Looking ahead, existing tariffs, new 45Z policies, record-high biofuel mandates, and the half-RIN provision are expected to support soybean oil demand in first-quarter 2026 as producers seek to maximize credits through domestic feedstock use. US soybean oil futures closed at 49.44¢/lb on 30 December, down by 14pc from their July peak of 57.54¢/lb, making soybean oil more attractive compared to waste-based feedstocks.

Agriculture groups claim that expanded crush capacity and record production will provide sufficient soybean oil to meet biofuel demand, reducing reliance on imported feedstocks. In addition, the 45Z credit premium for soybean oil is expected to rise in 2026 as regulators stop considering potential land-use impacts of crop-based fuels, narrowing the gap with credit values for waste-based feedstocks. Soybean oil is also positioned to gain a competitive advantage over canola oil, which receives a roughly 50pc lower credit value.

By Jamuna Gautam

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02/01/26

Viewpoint: Argentina wheat crop to roil 2026 markets

Sao Paulo, 2 January (Argus) — Argentina's record wheat production for the 2025-26 marketing year will continue to roil global markets in 2026, with a flood of low-protein wheat pushing feed prices lower as well as reshuffling trade flows to buyers for higher-protein wheat. Argentina is expected to grow 27.7mn metric tonnes (t) of wheat for the 2025-26 marketing year , the Rosario Board of Trade (BCR) said on 11 December, compared with its output of 23mn t in the prior marketing year. Both the BCR and the Buenos Aires Grain Exchange (Bage) have raised their forecasts multiple times in recent weeks as a result of record-high yields as the harvest progresses. Steady rains and good crop conditions during development have led to the high yields. Argentina's record harvest will add to a bigger crop expected in 2025-26 compared with a year earlier from other major wheat exporters, most notably the EU, Australia, and Russia. The US Department of Agriculture (USDA) forecasts an almost 5pc increase in the world's wheat output to 837.8mn t for 2025-26. Ample supply globally has weighed on wheat prices in exporting countries for months. The Argus price for the standard 11.5pc protein wheat in Argentina's upriver ports reached a 20-month low of $206.5/t in mid-October. That said, the record yields have resulted in unusually low protein content on average in the country's crop, raising concerns about the availability of milling-quality 11.5pc wheat. Reports put protein levels as low as 8-9pc in parts of Cordoba province, one of Argentina's top three wheat growers, as the harvest progressed into December. The south of Buenos Aires province — which often has higher-protein output than other areas — also only showed an average protein content of 9-10pc, based on a November crop tour of Bahia Blanca Grain and Products Exchange , extinguishing previous expectations that the region could deliver some 11.5pc wheat. The protein quality concern has subsequently pushed the price of 11.5pc wheat from Argentina back to a seven-week high of $217/t in the week of 15 December. The premium of 11.5pc over 10.5pc wheat has also widened, reaching as much as $15-$20/t early in the same week compared with less than $10 at the end of November. Buyers have had to cancel some export contracts and seek alternatives as wheat of lower quality than expected arrives at Argentinian ports. Quality concerns reshuffle trade flows The flood of low-protein wheat from Argentina is likely to continue to weigh on prices of feed wheat in global markets, a boon for buyers of that grade, while the lack of supply of 11.5pc and higher from the South American country is already boosting sales of those grades from other suppliers. Brazil — historically the biggest market for Argentinian wheat thanks to the geographical proximity — has already turned to other wheat exporters this season, as a result of a lack of high-protein wheat in Argentina's harvest this year. Brazilian buyers have bought at least two shipments of a total of more than 60,000t of Russian milling wheat scheduled to ship to Brazil in December, according to recent lineup data. Some southeast Asian millers are mulling a switch to Argentina's 10.5pc protein wheat, as long as other specifications are met, market participants said. But others in the region continue to insist on higher-protein wheat, they added, which could open the door for imports from Australia. Southeast Asia has been an important buyer of Argentinian wheat, with Indonesia, Bangladesh and Vietnam having purchased 1.95mn t out of 12.63mn t of Argentinian exports from the 2024-25 marketing year through November. By Jeffrey T. Lewis Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Viewpoint: Brazil’s corn demand to grow further in 2026

02/01/26

Viewpoint: Brazil’s corn demand to grow further in 2026

Sao Paulo, 2 January (Argus) — Market participants expect Brazil's domestic corn demand to continue growing in 2026 because of expanding corn ethanol production and ample national supply, while the export market remains sidelined. Domestic demand should increase by nearly 4.1mn metric tonnes (t), reaching an all-time high of 94.6mn t in the 2025-26 season, according to national supply company Conab. Corn ethanol will likely account for the greatest share of this hike. Market participants forecast that Brazil will produce a record of approximately 12bn l (207,120 b/d) of the grain-based biofuel in its 2026-27 cycle, which runs from April 2026 to March 2027. That is when corn produced by the 2025-26 crop will be crushed. The national biofuels industry is set to receive around 30mn t of corn, based on an estimate that 1t of corn can produce around 400l of ethanol. Demand from corn ethanol units is poised to grow by 5mn t, considering nearly 10bn l expected to be obtained in the 2025-26 cycle, according to estimates from the corn ethanol association Unem. That surpasses Conab's 4mn t growth forecast. Brazil has 24 corn ethanol units operating nationwide, most of them in central-western states. Mato Grosso — Brazil's largest corn producer — is expected to crush 13.5mn t for corn ethanol production in the 2025-26 crop, data from Unem show. That accounts for 26pc of the state's output, based on a 51.7mn t projection from the state's institute of agricultural economics Imea. Data from Imea and Unem show that corn ethanol's share of demand rose from 22.5pc — or 12.5mn t of corn — in the 2024-25 season, when Mato Grosso produced a record of 55.4mn t of corn . Corn ethanol production has grown substantially in Brazil over the past five years because it is a renewable source of energy and contributes to the decarbonization of the Brazilian fuel matrix. Market participants also cite its valuable by-products — corn oil, dried distiller grains (DDG) and distiller's dried grains with solubles (DDGS) — and bumper national corn production as other factors that support large investments in the biofuel. Brazil is poised to produce 138.9mn t of corn in the 2025-26 season, including the first, second and third crops, according to Conab. That is the second-highest volume of the grain ever in Brazil's historical series, only 1.5pc behind the record from the 2024-25 cycle. Excellent weather conditions supported gains in the previous season. The second corn crop accounts for most of the harvest each season. The 2025-26 second corn crop is on track to reach 110.5mn t, also ranking second in the historical series. The second corn crop also accounts for most of the grain geared to ethanol units, and it heavily supplies the export market, which was sidelined by competition with the national industry since the 2023-24 season. Domestic buyers have reportedly paid prices above bids from importers, which kept importers at bay from Brazilian shipments in 2025. Sales to the export market also dwindled at the time. Despite raising corn production by over 26mn t in the 2024-25 season, Brazilian exports rose by just 1.5mn t from the prior crop. Conab projects shipments in February 2025-January 2026 at 40mn t, down from the 2021-22 and 2022-23 seasons by 6.6mn and 14.6mn t, respectively. Both cycles accounted for record high production at the time. Conab forecasts exports to recover their share in the 2025-26 season by reaching 46.5mn t, accounting for 33.5pc of the total produced. Exports accounted for 28.4pc of 2024-25 output, down from 33.3pc in the prior cycle. Carryover stocks into 2025-26 of 14.1mn t should support this recovery, surpassing the 1.9mn t a year earlier. Yet exports continue to account for less than the 41pc registered on average from the record crops of 2021-22 and 2022-23. Brazil increased corn exports from 2020 to 2023, a trend that has since reversed due to an expanding domestic market.It had managed to surpass the US in volumes shipped in the 2022-23 season, but Brazilian exports then returned to second place due to lower production and growing demand from domestic corn ethanol output. Exports should remain sidelined for the Brazilian corn market because international buyers are shifting to other origins rather than raising bids to compete with domestic industries, according to market participants. Yet some countries continue to prioritize Brazil's product, such as Iran and Egypt, because of sanctions from other corn producers and lower logistical costs, respectively. Brazil continues to expand DDG/DDGS market Unem expects Brazil to produce 4.8mn t of DDG and DDGS in the 2025-26 season, up from 4.1mn t in 2024-25, on higher corn ethanol production. Mato Grosso state should account for 2.9mn t of DDGs — which includes both those with solubles and without solubles — in the 2025-26 cycle, an increase from the 2.7mn t in the 2024-25 season. DDG is the main byproduct of corn ethanol production. It is a protein-rich commodity used to replace corn, cottonseed, soybean meal and other feed ingredients in the animal protein sector. Although most of Brazil's DDG production is destined for the domestic market, Brazil has been expanding its exports. Shipments totaled 714,900t in January-October, according to the association of cereal exporters Anec. The recent opening of the Chinese market creates export prospects for the 2026-27 crop season. Until 2025, China imported all of its DDGs from the US. Currently, Brazil has DDGs business with 18 markets. The main one is Vietnam, with 639,045t exported from 2023-2025, according to Unem reports. It was followed by Turkey, which received 403,125t in the period, New Zealand, with 311,635t, and Spain, with 246,600t. By Sofia Zizza and Nathalia Giannetti Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Viewpoint: RIN market awaits US policy clarity

02/01/26

Viewpoint: RIN market awaits US policy clarity

New York, 2 January (Argus) — US renewable fuel credits have traded in a narrow range for months but are likely to break out soon, when President Donald Trump's administration provides more clarity on incentives in the new year. Under the Renewable Fuel Standard, US oil refiners and importers must annually blend different types of biofuels or buy Renewable Identification Number (RIN) credits from those that do. The RIN market is closely watched by producers and marketers of biofuels such as ethanol, biodiesel and renewable natural gas, since higher credit prices make blending economics more attractive. Policy shifts supported RIN prices in 2025, including new tax credit rules that slashed subsidies for many fuels and encouraged the use of scarcer low-carbon feedstocks, as well as a plan Trump administration plan to require record-high blending during the next two years and to halve RIN credits for foreign fuels and feedstocks. Following the release of that proposal in June, values for current-year ethanol D6 and biomass-based diesel D4 credits rose to their highest levels since September 2023. RIN traders anticipated more expensive input costs, as reflected in a widening soybean oil-heating oil spread, hurting credit generation at the same time as the Trump administration moved to mandate more blending — the perfect storm for rising prices in 2026. But uncertainty over other policies has limited RIN credit growth more recently. Since October, current-year D4 and D6 credits have closed each session between 100¢/RIN and 110¢/RIN, rare for markets that are prone to frequent volatility. The government's unclear approach to exemptions from the biofuel blend program — which eligible small refiners can request at any time for any year — is one wrinkle. During Trump's first term, officials granted small refinery exemptions en masse, injecting a burst of added supply into the RIN market that sank credit prices and made it easier for refiners to reach their targets. Last summer, the Trump administration granted dozens of full and partial exemptions, and more requests are pending, raising fears of a similar supply shock. But the potential weakness comes with a parachute. The Trump administration has floated making oil companies without exemptions bring more biofuels to market over the next two years to offset recent waivers. The plan has divided the industry and kicked off a last-minute lobbying campaign, with oil majors hoping to avoid picking up the slack and biofuel advocacy groups warning of pain for farmers if biofuel demand lags. So the market is at a standstill, with RIN traders guessing as to future policy. Strong mandates, penalties for foreign feedstocks and compensating for recent exemptions would support prices. But shifts in policy — coupled with guaranteed higher tax breaks for crop-based fuels in 2026 — threaten the opposite. Even if administration officials stay quiet until regulations are finalized, the calendar could provide RIN traders with an important signal. The Trump administration last told a court that it expects to finalize updates to the biofuel blend program in first-quarter 2026 , meaning the industry will start the year lacking clarity on how many biofuel gallons — and what type — they should bring to market. The delay is important because US regulators have been more cautious in the past when finalizing retroactive biofuel mandates to avoid legal scrutiny. But the biggest price moves will ultimately depend on final policy clarity. By Matthew Cope and Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Viewpoint: Australia’s urea outlook steady for 2026

02/01/26

Viewpoint: Australia’s urea outlook steady for 2026

Sydney, 2 January (Argus) — Australia's urea imports in 2026 are likely to maintain the record levels of recent years, as forecasts for favourable weather conditions support strong cropping demand. But low affordability levels among growers could weigh on import demand. Australia's urea imports are likely to have reached 3.8mn t in 2025, about 5pc below 2024 but 15pc higher than in 2023, according to figures from the Australian Bureau of Statistics (ABS) and vessel tracking data from Kpler. Australian fertilizer importers told Argus they juggle a range of factors when deciding purchase volumes. Considerations include seasonal conditions, fertilizer affordability and crop outlooks, all of which differ across growing regions. Fertilizer affordability stays low Fertilizer affordability will be a key determinant of import demand. Global fertilizer affordability reached a three-year low in July 2025 but has recovered in recent months . Global nutrient affordability stood at 0.72 points in October, up from 0.69 in September and 0.61 in August, Argus data show. An affordability index — comprising a fertilizer and crop index — above one indicates that fertilizers are more affordable compared with the base year set in 2004. An index below one indicates lower nutrient affordability. Australian granular urea was assessed at A$760-770/t fca Geelong on 18 December. Granular urea had reached A$900/t fca Geelong on 4 September, a 21pc increase from A$745/t fca Geelong on 3 January 2025. Fluctuations in the value of the Australian dollar will act as a buffer or hurdle to fertilizer affordability. The Australian dollar approached a 2025-high of $0.67 to the US dollar at the end of December, which has dampened fertilizer import costs. If the dollar should fall sharply, as happened in April when it dropped to $0.59, this could weigh on fertilizer affordability and temper imports. Growers' returns from their crops will be weighed down by global oversupply, given near record production levels of key crops such as wheat, feed alternatives and canola from global producers. The lack of any supply shock, major geopolitical risks and fading demand from major importers — particularly China — have led to subdued prices for wheat, squeezing farmer margins and potential returns from fertilizer applications. Fertilizer affordability has not eased enough for there to be a spike in demand but has improved enough to support steady imports from previous years. Average crop, weather forecasts Urea imports during the October-September marketing year tend to move in step with Australia's crop outlook (see graph). Favourable seasonal conditions and crop development will support fertilizer application to improve yields, and in turn, domestic fertilizer purchases. If current soil moisture levels are maintained until the autumn months of March-May, this could support crop area intentions and plantings and, in turn, urea imports. But long-term weather outlooks are unreliable and treated with caution by some importers, Argus understands. Planting conditions and crop allocation could be influenced by seasonal conditions in coming months. Most of Australia's cropping regions have an even chance of exceeding median rainfall in January-March 2026, Bureau of Meteorology (BoM) data show. Australia's crop winter crop outlook will partially depend on planting conditions during April-June. Urea application times differ from year to year based on rainfall patterns and the crop type, but most urea is applied from February to July for pre-planting and topdressing (see graph). South Australia's expected rainfall in January-March is less favourable, showing a less than 45pc chance of exceeding median rainfall in growing regions. Queensland and New South Wales growing regions have a 40-65pc chance of exceeding median rainfall, while Western Australia has a 45-55pc chance, BoM data show . The weather and soil moisture outlooks similarly suggest steady imports from previous years, but less chance of an increase from 2024 and 2025 levels. By Susannah Cornford and Edward Dunlop Australia urea and winter crop output '000 t Australia urea import seasonality t Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Viewpoint: US jet fuel output seen rising with demand

31/12/25

Viewpoint: US jet fuel output seen rising with demand

Houston, 31 December (Argus) — US jet fuel production could increase in line with airline demand in 2026 despite the Energy Information Administration's (EIA) projections of a production decrease due to biofuel blending policy for road fuels. The International Air Transport Association (Iata) expects global airline demand to increase in 2026, with global passenger volumes expected to reach 5.2bn, up by 4.4pc compared to 2025, while cargo volumes are expected to increase by 2.4pc to 71.6mn t. But the EIA reported in its December Short-Term Energy Outlook that 2026 jet fuel production will average 1.73mn b/d, down by 4.9pc compared to 2025estimated average, noting weakening demand in the next year. The agency expects the first quarter production to average 1.71mn b/d and the fourth quarter production at 1.68mn b/d, keeping the full-year production average down. But a number of factors — including continued use of less fuel-efficient jets and higher costs for meeting US road biofuel rules — should support US jet fuel production. Jet output is expected to keep pace with 2025 levels or higher, averaging 1.81mn b/d, Argus Consulting forecasts. Bottlenecks in the production of more fuel-efficient next-generation aircraft delayed the flow of new planes this past year, and are expected to worsen, limiting growth in the aviation section until at least the 2030s. Aircraft delivery delays from major manufacturers like Boeing have increased over the past year due to several factors, including tariffs on metals and electronics deriving from US-China trade tensions and engine production outpaced by airframes output. Costs around US biofuel blending obligations, particularly for distillates like biodiesel and renewable diesel, are also supportive of jet fuel production. Prices for D4 and D6 RINs, which reflect the cost of meeting Argus Renewable Volume Obligations (RVO) for biodiesel and ethanol, respectively, rose during 2025, from 9.45¢/USG on 2 January, cresting at 17.04¢/USG in June, before falling to roughly 15¢/USG for much of December. In June, the EPA proposed record-high blending targets in the biomass-based diesel category for the next two years — which will likely make compliance costs for those fuels even more expensive. But unlike road fuels such as gasoline and diesel, jet fuel is not bound by these blend mandates under the RFS. This means refiners looking to taper their blending obligations may retool production assets for more jet fuel and less diesel. A number of refiners are already making that pivot. Marathon Petroleum, one of the largest US independent refiners, is spending millions of dollars to increase jet fuel capacity at its 253,000 b/d Robinson, Illinois, refinery, which is expected to be completed by the end of 2026. US independent refiner HF Sinclair is also planning to boost jet fuel capacity at its 145,000 b/d Puget Sound refinery in Anacortes, Washington, to help serve the western US market, the company said in a third-quarter earnings call. CVR Energy started producing jet fuel at its 132,000 b/d Coffeyville, Kansas, refinery during the third quarter of 2025. Another independent refiner, Delek, has upgraded its 83,000 b/d El Dorado, Arkansas, refinery to produce jet fuel, the company said in May. The EIA does expect more demand for jet fuel in 2026. The product supplied projections for 2026 in the latest STEO was 1.74mn b/d, up by 0.6pc compared to 2025. But it still projects first quarter production to drop to 1.61mn b/d and fourth quarter to reach 1.72mn b/d, with second and third quarter projections higher at 1.82mn b/d and 1.81mn b/d, respectively. Originally expected to be finalized in late 2025, the EPA is set to confirm biofuel blending targets, as well as consider the reallocation of exempted volumes approved during 2025 in the first quarter of 2026 . Doing so would provide biofuel producers and obligated parties alike with a clearer view of expectations for 2026 and 2027. Unless biofuel production overshoots the thresholds for blending demand, or the EPA chooses not to reallocate a substantial volume of small refinery exemptions, market participants anticipate further continued strength for RIN prices. If these mandates do come to fruition and toughen the obligation refiners face for producing diesel, retooling and pivoting to a higher jet output would alleviate the added cost of producing finished road fuels. By Hunter Fite and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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