The Farm Lobby is WEAK! Year-Round E15 Ethanol Dropped from Farm Bill

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Farm bill votes are underway—amendments Wednesday night, final vote expected Thursday. The E15 fuel controversy nearly derailed it, but that plan's been dropped. Bipartisan support is building despite House Democrat leadership opposition, as farmers facing rising costs and bankruptcies need relief now.

Senator Cindy Hyde-Smith is pushing to cut fertilizer costs with the Lowering Input Costs for American Farmers Act, targeting tariffs on phosphate imports from Morocco — which controls over 70% of global phosphate reserves. The American Farm Bureau and American Soybean Association are on board.

Oil surged nearly 7% Wednesday to $106.88/barrel as Strait of Hormuz disruptions look increasingly long-term. Trump says the blockade holds until Iran agrees to a nuclear deal — and Tehran isn't blinking. Markets are starting to price in a real supply shock, not just geopolitical noise.

Wheat futures pulled back slightly after hitting a near two-year high, settling at $6.53/bu on the July26 contract. Drought concerns across the Plains remain, and the forecasted rain is expected to miss the driest areas. Corn and soybeans both closed higher.

Bunge raised its 2026 profit outlook after a strong Q1 beat—higher soybean oil prices, solid crush margins, and rising biofuel demand driven by new EPA mandates are all tailwinds. Trade tensions and supply chain risk remain the key unknowns.

US ethanol production dipped to 1.01M bpd last week, down 3% week-over-week. Stocks fell to 25.88M barrels. Despite the drop, Corn Belt ethanol margins remain solidly positive at 15–40 cents.

Transcript

Farm Bill and E15 Sales

SPEAKER_01 0:08

Morning guys. It's Thursday, April 30th, 5 24 a.m. Central Time. Grain markets are mostly lower this morning. December corn futures down two cents at 495 and three quarters. November soybeans down three at 11.68 and a quarter. July Chicago wheat down seven and three quarters at 6.45 and a quarter. July Kansas City wheat down 11 and a quarter at 693.5. September spring wheat down four and a half at 727. We've got some farm bill news to kick off the day today.

SPEAKER_00 0:36

House Republicans voted on amendments to the farm bill Wednesday night with a final vote expected today. The path was not smooth. GOP leaders nearly delayed the vote after a revolt over a plan to attach E-15 fuel sales to the bill, but that plan was dropped. The bill has bipartisan support, with dozens of Democrats expected to vote yes, despite party leaders pushing against it. The farm bill is three years overdue, and supporters say farmers facing rising costs and bankruptcies cannot wait any longer.

Fertilizer "Plan"

SPEAKER_01 1:09

It sounds like they're going to vote on this today. It sounds like they've got their ducks in a row and that this thing will be pushed through. Uh, here's a quote from the political piece. After meeting with leadership, some livid farm state Republicans agreed to decouple a plan to allow year-round sales of E-15 fuel with the farm bill following outcry from oil state lawmakers. That's very disappointing. It just goes to show you how weak the farm lobby is and the biofuel lobby is relative to the almighty and powerful oil lobby. If you can't get this thing done now, I don't know when you get it done. I showed you guys this chart earlier this week. Ethanol is at a massive, massive discount to gasoline. Wholesale ethanol is at its cheapest level versus gasoline in 20 years. It makes tons of economic and financial and mathematical sense to push through permanent year-round E-15 legislation right now, and they just can't get it done. I'm sure they'll try again through some sort of separate bill that kind of isolates E-15 from everything else. These guys just didn't want it in the farm bill. But I think they're going to have a tough time with it. They they really, really are. And I just I couldn't imagine a better time to push this thing through than now, given the mathematics. There is year uh there's um temporary year-round E-15, not year-round, but uh for another month, I think through May, we can sell year-round E-15, and then they'll probably extend that through the summer. And they've been doing that every year. But what what the the farm lobby and what the biofuel fuel lobby wants is certainty. They want this to be a permanent year-round thing so that they can expand infrastructure and and really push it. The uncertainty regarding these, like every year they do an emergency waiver or whatever. Um, that's just it's not it's not allowing the expansion that we need to see.

SPEAKER_00 2:56

Senator Cindy Hyde Smith is advocating for the lowering input costs for American Farmers Act, a bill that would remove tariffs and fees on phosphate fertilizer imports from Morocco. Notably, Morocco controls more than 70% of global phosphate rock reserves. Major farm groups such as the American Farm Bureau and the American Soybean Association support the legislation. The bill has been referred to the Senate Finance Committee, where it must gain approval before advancing to the full Senate, uh, to the full Senate for a vote.

Oil Prices Jump, Corn Relationship

SPEAKER_01 3:28

So this sounds good, but it's still not something that's going to bring immediate relief as it relates to fertilizer prices. USDA two days ago uh posted this, and this is what they've done so far with regard to fertilizer. They waived the Jones Act for 60 days, they waived import restrictions from Venezuela, they directed Environmental Protection Agency to revise diesel exhaust fluid rules. They added potash to the critical minerals list, they signed a USDA Department of Justice uh memorandum of understanding on antitrust enforcement and called on global partners to refrain from export pro prohibitions or restrictions. I just I don't know or believe that any of this is going to result in immediate fertilizer uh price relief. And the the specific products that that we're having trouble with right now would be your nitrogen products and urea in particular. And I just don't know that this um this this proposal as it relates to Morocco is gonna really do a whole lot. So I don't know what the game plan is, but um the nitrogen situation, especially as we start talking about the 2027 crop and uh fall applications, that's gonna be a big deal.

SPEAKER_00 4:40

Oil prices jumped yesterday amid mounting amid mounting concerns of prolonged shipping disruptions through the Strait of Hormuz. U.S. crude advanced nearly 7% to settle at$106.88 per barrel. The rally was partly driven by President Trump's announcement that the U.S. will maintain its blockade of the strait until Iran agrees to a nuclear deal. However, Tehran appears in no rush to resume negotiations. Prices were further supported by a larger than expected draw in U.S. crude inventories last week, along with record crude exports. Analysts believe the market is no longer merely pricing in geopolitical risk, but is increasingly factoring in the possibility of a long-lasting supply shock caused by the war.

Wheat, Corn, Soybean Price Action

SPEAKER_01 5:24

The nearby June WTI crude contract posted fresh highs just overnight up to 110.93. On a continuation basis, the peak in this um current cycle was 119.48 following the initial uh attacks on Iran. And we're sitting, you know, 108 in change this morning. So you're closer to the upper end of the range than you are to the bottom end of the range. And if the market were to trade above or close above that 119.48 level, that probably opens the door to a test of uh those highs from 2022 up near 130. As it relates to the grain markets and the correlation, the correlation hasn't been very good. WTI crude futures are up 89% year to date. Corn futures are up less than 9% year to date. Uh very often you'll see a strong correlation here because we've got the fuel tie because of the general commodity tie, um, because of ethanol. And we're just, we're really not seeing it. Corn futures are acting okay. They're acting okay, but not as good as they could be acting, considering the crude situation, the fertilizer situation, all of those things. And we'll get to some more corn specifics here in just a second.

SPEAKER_00 6:29

Chicago wheat futures edged lower yesterday as the July 26th contract fell roughly five cents to settle at 653 per bushel. Despite the pullback, the market continues to find underlying support from concerns that ongoing drought across the U.S. plains could reduce yields. While rainfall is forecast for parts of the region in the near term, it is expected to miss the driest areas. Meanwhile, corn futures ended the session higher, supported by expectations of reduced acreage amid rising fertilizer costs. Soybean futures also closed higher, buoyed by strength and crude oil prices.

SPEAKER_01 7:03

Weather forecast for the Southern Plains, kind of wishy-washy. Um, maybe some rain over the next seven days. I don't know whether or not this rain, if uh it comes to fruition, is going to be too little too late. There's a little bit of additional rain in the extended forecasts, which have failed. The markets posted fresh highs, the wheat markets posted fresh highs yesterday and then backed off just a little bit. Um, July HRW futures traded up to 17 and a uh 718 and a half. We're below$7 early this morning. SRW futures July contract traded up to 671 and a half. We're down in the 640s this morning. Uh spring wheat futures traded up to 739 and a quarter in the September contract yesterday. We're off of those highs just a little bit. The big uh buzzword yesterday as it relates to wheat was imports. And the story is this U.S. wheat futures have rallied sharply, but the global wheat market is not cooperating with that story or with that rally. And U.S. wheat has become so expensive relative to its uh overseas competition that we could actually uh import some wheat from places like Russia or the Black Sea or elsewhere. And from a global standpoint, wheat is very much uh in we're we're adequately supplied globally. It's just that in the United States, with regard to the HRW crop in particular, we might end up a little bit short. So could you see some imports of wheat from uh elsewhere to kind of uh fill any holes or gaps? Yeah, you absolutely could. Is that something that's gonna cap the reality? I I don't know, but that's one of the stories that was floating around yesterday. Let's look at corn. Uh that's still we here's d's corn. We traded up to 490, 499 and three quarters overnight, couldn't get through$5. I think there's a lot of farmer selling here, uh, forward selling of uh current marketing year. I'm sorry, of new crop bushels versus like you know 490s uh D's corn futures. And um that may continue. I think we can punch through five bucks, excuse me, but I think farmer selling has kept this thing and has kept it below five dollars. November soybeans did post some fresh highs overnight. We traded up to 1178, but we've backed off a little bit here um early this morning.

SPEAKER_00 9:13

If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewers about some of our recent premium videos?

Bunge Profits

SPEAKER_01 9:19

Brian suppose on yesterday did charts, and this is some hardcore grain market analysis. The charts have become very interesting over the last couple of weeks, wheat in particular, but I think corn has gotten interesting. I think soybeans are probably the least interesting of the three. But um, if you're looking for some real analysis that doesn't really have much to do with like fundamentals and it's just pure technical, this is something you should watch. Brian's the best in the business. We had a bunch of like really positive responses to this video because I I think he really laid it out very, very well. I did a cash grain marketing review earlier this week, talked about everything that I've advised with regard to corn, soybeans, wheat, multiple crop years worth, ran through the spreadsheets of what I've advised previously, what the game plan is moving forward. If you guys want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a$50 per month subscription. You can cancel at any time. No other fee, no other obligation. Nobody will try to sell you anything else. If you're busy this week and I know that you are, you can sign up uh on your phone. It takes about 30 seconds to do. Go to standardgrain.com, just click subscribe. There's a giant button on the first uh page, and um you can do Google Pay or Apple Pay or Cash App or credit card, whatever you want to do. And uh you'll be getting the emails. You can be watching them uh this morning. So uh if you're looking for some tractor uh planting, listening material or viewing material, uh check that stuff out, guys.

SPEAKER_00 10:33

Bungy raised its 2026 profit forecast yesterday after reporting stronger than expected first quarter earnings. The company's profitability has been supported by higher soybean oil prices and strong crush margins, driven in part by elevated crude oil prices tied to the conflict conflict over in the Middle East. Increased biofuel demand bolstered by new mandates from the EPA also supported earnings expectations. The conflict has lifted global grain prices, prompting farmers to sell stored crops and boosting trading and processing processing activity. However, ongoing trade tensions and supply chain disruptions tied to the conflict remain key risks going forward.

Ethanol Production

SPEAKER_01 11:13

Bungie as a company is killing it. The stock is up almost 42% year to date, while the SP 500 is up just slightly more than 4%. Over the last year, Bungie stock is up 61%. The SP is up 28% during that same period. Uh, Greg Heckman, Greg Heckman, is the CEO of Bungie and Hitch had some uh, I think insightful comments that were in the uh Reuters piece here yesterday. Um, this is actually from the CFO, the first one. Q1 grain merchandising was hurt by higher ocean freight costs. Hard to see when things are going to turn. I think he's talking about the Iran situation. Uh Bungie CEO Greg Heckman says it's getting kind of late for old crop U.S. soybean sales to China, says also watching for corn sales. That's an interesting comment, I think, as it relates to China. Uh Bungie CEO Greg Heckman says global soymeal demand continues to surprise in a good way. And uh that's a positive. Soybean meal is still cheap relative to a lot of things. And then he said he is not expecting a big shift in U.S. corn and soybean acres due to fertilizer availability, but that a bigger shift is possible in South America. So some interesting uh tidbits from a guy who is in the know right there.

SPEAKER_00 12:22

U.S. ethanol production declined last week. Weekly output was was reported at 1.01 million barrels per day, down 3% compared to the prior week and down 2.3% versus the same week last year. Ethanol stocks fell to 25.88 million barrels. The print was down 4% compared to the previous week, but up 1.6% compared to the same week last year. According to Reuters data, U.S. ethanol margins range from 15 cents to 40 cents positive across the corn belt.

SPEAKER_01 12:50

Ethanol is projected to account for 34% of all demand for U.S. corn this year. Interesting to note that exports are now projected to account for 20% of all demand for U.S. corn this year, which is a higher than normal percentage. Ethanol production is strong, although we are not quite at the pace needed to hit USDA's projection for corn demand. They may have to make some small adjustments there at some point in the future. Uh, stocks are high right now, but have a tendency to draw down really like through the month of July. What did cattle do yesterday?

SPEAKER_00 13:20

Cattle futures were mixed. Live cattle traded in a wide range uh from 25 cents lower to 420 higher. Feeders were 55 cents lower to 37 cents higher. Box beef prices were mixed. Choice was down 85 cents at 388.05, while select was up 253 at 386.25.

SPEAKER_01 13:38

I'll call the outside markets quiet. Stocks are mixed to higher. Uh, Treasury's up just a little bit. Crude oil is up 27 cents in the June WTI 107.15 last trade. Have a great day, guys. We'll be back Friday.