For the week, July corn was 2¢ higher, December corn fell 6¼, July soybeans were up 12½, November soybeans gained 17¾, July soybean meal lost $3.80 and July soybean oil soared 311 points. July hard red winter wheat fell 8½¢, July soft red winter wheat lost 11 and July hard red spring wheat fell 1¾.
Soybeans rallied sharply on Friday with soybean oil closing limit up in all contract months in reaction to bullish news from EPA on the Renewable Volume Obligations for biomass-based diesel. The agency raised mandated blending levels in the Renewable Fuels Standard to 5.61 billion gallons for 2026 and 5.86 billion gallons for 2027. EPA also put discounts on RINs for foreign fuel or feedstock of 50%, which will disincentivize those imports.
Jerry Gulke, president of the Gulke Group, says the news came as a surprise but was positive for farmers and the biofuels industry.
“I’m totally shocked it came out that much better than expected,” he says. “It might not be a short thing with what we’re seeing with crude oil prices rising in reaction to the geopolitical tension escalating between Israel and Iran. I think that forced the issue.”
Soybean oil responded accordingly, with a limit up move, and will be under expanded limits on Monday, which Gulke thinks could easily be tested.
“We had a target on soybean oil of 50¢, and it got there, and this news is going to blow the lid off that price. I would expect another limit up move on Monday,” he explains.
Just how much of a game changer is this policy decision for the soybean market?
“It’s going to be really hard to get soybean prices to go down a lot from here,” Gulke says.
Currently, farmers aren’t holding a lot of old crop soybean inventory, but Gulke says this policy announcement could cause them to wait for prices to rally above $11 before making any additional sales.
There are long-term positives tied to restrictions placed on foreign imports of biodiesel and renewable diesel and the feedstocks to make biofuels, Gulke adds, when it comes to soybean and bean oil demand
“Iowa Senator Chuck Grassley said a few months ago if the administration would restrict the imports of used cooking oil (UCO) from China for use in biofuels it would increase the demand for U.S. soybeans by more than 200 million bushels per year,” he recalls. “That would wipe out our surplus and beg the question, how many more bushels of soybeans will it take next year and beyond?”
Gulke contends this could be a game changer for agriculture that could lead to higher oilseed and grain prices, which supports land prices and the entire farm economy.
For more information, contact Jerry at info@gulkegroup.com.
