US agricultural trade groups are focused on evolving domestic biofuels policy and diversifying export markets as key drivers for soybean and corn demand in the coming year.
Finalizing biofuel blending quotas under the Renewable Fuel Standard was highlighted as a top priority by American Soybean Association (ASA) president Scott Metzger during the Commodity Classic conference in San Antonio, Texas, last week.
"Soybean farmers urgently need biofuel policies finalized to boost domestic demand for soybeans and soybean oil," Metzger said in a press conference on 25 February.
"ASA continues, urging [the] administration to focus on finalizing priorities that create preference for soy-based biofuel feedstocks and reduce reliance on foreign feedstocks that distort markets and harm US farmers."
Metzger later added that he is hopeful the biomass-based diesel portion of the blending quota falls between 5.2bn and 5.6bn USG for 2026. The Environmental Protection Agency (EPA) reaffirmed yesterday that it expects to finalize quotas by the end of March, which were projected at 5.61bn USG for 2026 and 5.86bn USG for 2027 in the EPA's initial proposal last June.
Corn and sorghum trade group leaders also made calls for more clarity on biofuel incentives. National Corn Growers' Association president Jed Bower and National Sorghum Producers' chair Amy France both advocated for legislation that allows year-round sales of 15pc ethanol gasoline (E15), typically restricted in the summer months because of smog rules without emergency regulatory waivers.
A council of lawmakers in the US House of Representatives has struggled to come to an agreement on E15 legislation, pressured in part by oil refiners that opposed earlier bill drafts for limiting the exemptions they can win from costly federal biofuel blend mandates.
ASA vice president Dave Walton also expressed support for year-round E15, but pointed to the complex politics of any E15 bill by saying that any proposal should not come at the cost of reduced demand for biomass-based diesel. More ethanol consumption in the US could reduce demand for other biofuels that count toward annual blend requirements.
"Some of the proposals that are out there on the table now are a plus for E15, but there's a potential negative in there for biodiesel," Walton said.
Exports need more opportunities
In addition to discussions on US biofuel policies, continued growth of soybean exports to new and existing markets was emphasized as a second facet of soybean demand in the year ahead.
"Being able to work on new and emerging markets — we had a trade deal that was done with Indonesia," Metzger said. "We want to continue that and try to open up new markets as well."
The trade deal with Indonesia — finalized last month — includes an agreement to import at least 3.5mn metric tonnes (t) per year of soybeans and 3.8mn t/yr of soybean meal from the US for five years.
There is optimism that other countries can absorb some soybean demand should China not increase its purchases for 2025-26 to 20mn t, US Soy Export Council (USSEC) CEO Jim Sutter said.
Pakistan in particular is viewed as a growing destination for US soybeans. So far this year, Pakistan has purchased 1.09mn t of US soybeans, according to US Department of Agriculture data, the most since the country imported 1.54mn t during the 2017-2018 marketing year and well ahead of the average 413,000t per year over the last five years.
Globally, US soybean export sales to countries other than China are about 1.5mn t ahead of year-prior levels as of the week ended 19 February.
The ASA also supports the renewal of the US-Mexico-Canada (USMCA) trade agreement later this year, Metzger said. Mexico is the second-largest buyer of US soybeans, making the preservation of free trade between the US and Mexico a key factor for US exports.
The competitiveness of US soybeans in export markets could be adversely impacted by increased domestic demand and a subsequent rally in prices. Without an increase in supply, there is some concern that more soybeans could be used for domestic crush and tighten export opportunities, Sutter said.
But US soybean supplies could get a boost in the coming year, as soybean acres are expected to rise for the upcoming crop. Larger domestic production would leave ample soybeans for both domestic use and exports, particularly as China is expected to increase soybean purchasing to 25mn t for 2026-27.
