Episode Number
10338
Episode Show Notes / Description
- Naomi Blohm, TotalFarmMarketing.com
- RFS Rule's Impact on BioMass Based Diesel RINs
- Don Day, DayWeather.com
The April 28, 2026, Closing Market Report covers updates on agricultural markets, federal renewable fuel standards, and national weather forecasts. Naomi Blohm highlights a rapid planting pace for corn and soybeans across the Midwest, contrasted by stalled progress in Wisconsin due to heavy rains. She also notes that poor winter wheat conditions and ongoing geopolitical tensions in the Black Sea are driving up wheat futures.
Following the market update, agricultural economist Todd Hubbs explains that new Renewable Fuel Standard (RFS) mandates will push domestic biomass-based diesel production to its limits. He details that a structural shortfall in D6 (corn ethanol) RINs requires a backfill using D4 (biomass diesel) RINs, which is expected to sharply increase demand for feedstocks like soybeans or other oilseeds over the next two years.
Finally, meteorologist Don Day forecasts a weather shift that will bring beneficial rain to the drought-stricken Delta and Southeast regions, though severe dryness is expected to persist across the hard red winter wheat areas of the central and western Plains.
- RFS Rule's Impact on BioMass Based Diesel RINs
- Don Day, DayWeather.com
The April 28, 2026, Closing Market Report covers updates on agricultural markets, federal renewable fuel standards, and national weather forecasts. Naomi Blohm highlights a rapid planting pace for corn and soybeans across the Midwest, contrasted by stalled progress in Wisconsin due to heavy rains. She also notes that poor winter wheat conditions and ongoing geopolitical tensions in the Black Sea are driving up wheat futures.
Following the market update, agricultural economist Todd Hubbs explains that new Renewable Fuel Standard (RFS) mandates will push domestic biomass-based diesel production to its limits. He details that a structural shortfall in D6 (corn ethanol) RINs requires a backfill using D4 (biomass diesel) RINs, which is expected to sharply increase demand for feedstocks like soybeans or other oilseeds over the next two years.
Finally, meteorologist Don Day forecasts a weather shift that will bring beneficial rain to the drought-stricken Delta and Southeast regions, though severe dryness is expected to persist across the hard red winter wheat areas of the central and western Plains.
Transcript
cmr260428
- Naomi Blohm, TotalFarmMarketing.com
- RFS Rule's Impact on BioMass Based Diesel RINs
- Don Day, DayWeather.com
Todd Gleason: From the land-grant University in Urbana-Champaign, Illinois, this is the closing market report for the 28th day of April 2026. I'm Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Blohm at totalfarmmarketing.com out of West Bend, Wisconsin. We'll hear how the RFS rules impact biomass-based diesel RINs, and then we'll turn our attention to the weather forecast. Don Day will be here from DayWeather in Cheyenne, Wyoming, all on this Tuesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world online at willag.org. Todd Gleason's services are made available to WILL by University of Illinois Extension.
May corn for the day settled at $4.65 and a quarter, 4.5 higher. July at $4.75 and a half, up 6 and a quarter, and December corn at $4.95 and three-quarters of a bushel. A settlement price there, 6 and a quarter cents higher as well. May soybeans, $11.73, down 4 and a quarter. July, 2 and three-quarters lower at $11.89 and a quarter. And November beans, $11.67, a penny and a quarter higher. Bean meal futures down 40 cents. Soybean oil, $1.12 higher. Wheat futures for the soft red July, that's the harvest month, at $6.57 and three-quarters, up 28 cents today. And the hard red at $7.02 and a quarter, 27 cents higher.
Taking a look at some of the other numbers from the CME Group in Chicago, we'll start with the livestock figures. They show us that the nearby cattle futures are trading for the day at $253.50. That's up $4.55. Feeder cattle, a settlement price at $371.72 and a half, $4.27 and a half higher. And the lean hogs at $94.15, down 22 and a half cents. Here to make sense of some of those numbers with us is Naomi Blohm. She's at Total Farm Marketing out of West Bend, Wisconsin. Hi Naomi, thanks for being with us.
00:53 Ag Markets with Naomi Blohm
Naomi Blohm: Thanks for having me.
Todd Gleason: Let's start with the crop progress report from yesterday. What did you think of those numbers? Looks like Illinois, Indiana, Iowa are really moving along pretty good.
Naomi Blohm: Absolutely. Strong planting pace in the I-states for sure. When you look at the big picture, the nationwide corn is 25% planted. Last year at this time, we were 22% planted, and the five-year average is 19%. Beans trucking along on that planting pace at 23% planted. Last year we were 17% planted, and the five-year average is 12%. Folks are running where they can run before those rains came through. Maybe things are going to be a little bit slower this week with the recent rainfall that's happened, but we're off to a great start. A little hard to say there's any type of delay in the big picture when you've got a quarter of the corn and beans in the ground already.
Todd Gleason: What do you make of the wheat futures today? Why was there such a jump there?
Naomi Blohm: We had the crop progress readings for the winter wheat, which continued to show how winter wheat is only 30% good to excellent. A year ago, it was 49% good to excellent. When you look at the breakdown, Kansas, the number one producing state of winter wheat, was just 23% good to excellent, and 43% of the Kansas crop is poor to very poor. That kept the market supported, and then we saw additional technical buying come through for the Kansas contracts. Then the Chicago wheat contracts saw some technical buying there. What's interesting, because we're rightfully trading the quality issues for the Kansas City wheat and funds have been active with technical buying, DTN reported today that the winter wheat down at the Gulf has a $1.60 per bushel premium price to what's happening with the prices in Europe and Russia for hard wheat. Globally, we are starting to outprice ourselves competitively. We also still have a situation where global ending stocks are sufficient. I think this wheat run is definitely justified, but we're also at the point of keeping an eye on this and keeping it real, focused on some pricing here because I don't know how much more this wheat market can run.
Todd Gleason: Is the $1.60 premium at the port as much about what's happening in Kansas state as it is about the idea that wheat may not be able to make its way out of Russia and Ukraine as easily as it has during the war over the last four years?
Naomi Blohm: That's a really good point and has a lot of validity to it. We are still in the midst of that war. On the news wire today, Ukraine said they shot down more than 33,000 Russian drones during the month of March. That tells you how the war continues to escalate. Definitely, it could be countries wanting to have secure product, and they know the United States is going to be able to get the product where it needs to go on time. That could be a concern out of the Black Sea.
Todd Gleason: What do you make of the rest of the marketplace, corn, soybeans, and such?
Naomi Blohm: We are still range-bound for the old crop corn and December corn futures, knocking on $5 corn for December futures. It was interesting to note that the March contract for corn and the July 2027 contracts were able to make new highs today. We'll see if December futures for 2026 have a reason to break through that $5 handle or not. It might be hard to get through that without some specific friendly news. With the planting progress going so fast, I'm not quite sure what news it would take to justify December corn futures trading above $5. I do know there was a lot of cash movement today between old crop cash and new crop cash sales on the rally we've had, and the opportunity that's in front of folks.
Todd Gleason: Before I let you go, I do want to know in your area, have farmers been able to turn a wheel? It was so very wet early on there.
Naomi Blohm: Wisconsin is a very different animal right now compared to other places in the Midwest. We've had so much rain over the past two weeks. The area where I live, it's been five to eight inches of rain and nothing is moving. We had another half inch last night. I think some of the dairy farms are getting antsy, wanting to get some of the manure out and spread on fields. We do have drier weather coming, but we are not forecast to get above 60 degrees for the next two weeks. It's a little slow going up here, but we've been through that before.
Todd Gleason: Thanks so much. We'll talk with you again next week.
Naomi Blohm: Thank you.
Todd Gleason: That's Naomi Blohm. She is with totalfarmmarketing.com.
07:50 RFS Rule's Impact on BioMass Based Diesel RINs
Todd Gleason: The new federal rules regarding biomass-based diesel fuel production in the United States are going to push domestic production capacity to its limit this year. Next year, agricultural economists Todd Hubbs and Scott Irwin have written an article on the topic. It's part of their Rewriting the RFS Playbook series. The RFS, or the Renewable Fuel Standard, is what brought corn-based ethanol into wide use in the 2000s and early 2010s. The production of corn-based ethanol has mostly maxed out. It is, on a related note, why the United States Congress is now grappling with year-round E15, or 15% ethanol blends, for the nation's gasoline supply. However, in an odd twist, because corn-based ethanol is exported as well as being used domestically, the way it counts towards meeting mandates set in the RFS comes up short. The math here is difficult to calculate. It is what Todd Hubbs from Oklahoma State says he and Scott Irwin from the University of Illinois have been trying to bottom-line as it's related to how many gallons of biomass-based diesel fuel—think soy diesel and renewable diesel—need to be produced to meet the new renewable volume obligations released by the Trump administration. Each gallon is assigned a RIN, or Renewable Identification Number.
Todd Hubbs: The new mandates require net RIN generation for D4s to be 10.99 billion in 2026 and 11.89 billion in 2027, which is an amazing increase from the 7.1 billion required in 2025. It is very bullish for feedstock to make biomass-based diesel. It really pushes us to the limit of BBD capacity in this country. What we do in the article, Todd, is go through how we calculated our balance sheets and some of the assumptions we make. We make a lot of assumptions because you have to. There are uncertainties involved, but this is Scott and my best effort to figure out how many RINs we are going to need to meet the RVOs in the D4 category over the next two years.
Todd Gleason: By the next two years, Todd Hubbs means this year, 2026, and next year, 2027. Again, the math and the policy here are difficult. In part, this is because Congress originally assigned RIN numbers based on the desired environmental impact. The lower the number, the more desired the related fuel. Generally speaking, D6 RINs require a 20% greenhouse reduction. Ethanol made from corn is an example of a D6 RIN. D6 RINs are also the default, or one-for-one value, meaning one gallon of ethanol production is equal to one RIN. There are different denominations with different values, and the federal government limits how each may be used. While D6 RINs are the default, the government only counts them for use and trade within the domestic gasoline supply. If you put 10 gallons of 10% ethanol in your car, for instance, that's worth one RIN. That RIN generally cannot be traded to other RIN categories. The diesel fuel RINs, D4s, can. The D4 diesel fuel RIN can trade up to the D6 ethanol for gasoline RIN category. D4s assigned to soy diesel are worth 1.5 RINs, and those assigned to renewable diesel are worth even more, maybe 1.6 or 1.7. That's a lot of math. Suffice it to say, corn ethanol RINs cannot be substituted in for soy diesel or renewable diesel made from soybeans, but it can happen the other way around. I've limited the discussion here to corn and soybeans, but other crops and feedstocks are used in each RIN category. Again, here's Todd Hubbs.
Todd Hubbs: Inside the Renewable Fuel Standard, the different RIN categories are nested based off how much carbon they offset. D6 is the base RIN, typically made with corn to create ethanol. Milo is also used, and there are other feedstocks, but the vast majority is corn ethanol. They set that at 15 billion gallons in the RVOs. When they do small refinery exemptions, that goes back through the percentage standards and ups that D6 number, because it's a percent of all the gasoline and diesel consumed in the United States. When they take out some from the obligated parties for SREs and reallocate 70%, that's what they're talking about giving back in subsequent years. The reason you have to use D4s to make up the difference is the standard for D6 is above what we blend in the United States. When they first did the RFS, they thought our gasoline consumption would keep going up, and when you set it at 15 billion gallons at 10%, you would meet it with D6s. That never happened. There's a D6 shortfall because we don't blend 15 billion or 15.7 billion gallons of ethanol into our gasoline. Because of that shortfall, the next available thing to meet that obligation in the RVOs is a D4. You can use a D5, a D4, or a D3, but D4 is where all the action is because we make a lot of biomass-based diesel. Does that make sense?
Todd Gleason: Yes and no. The United States exports corn-based ethanol. RIN numbers assigned to those gallons are retired. They do not count. If they were used domestically, the D4 RINs—biomass-based diesel and renewable diesel—wouldn't necessarily need to be used to meet the annual D6 RIN mandate.
Todd Hubbs: The D6s can't move anywhere. If you generate a D6 RIN, it's going to meet the D6 category. What's nested is the D4s can meet the D6s, the D5s can meet the D6s, and a D3 can meet any of the advanced mandates plus the D6s if necessary. We rarely exceed the quantity necessary to meet the volume obligation in D3s. The idea is, when you have this shortfall because we're not blending enough ethanol into our domestic gasoline supply, what comes in to make up the difference is D4s.
Todd Gleason: It is this nesting, using D4 RINs to meet D6 mandates, along with the limited biomass-based and renewable diesel production in the United States, that has Irwin and Hubbs thinking about the marketplace. RINs have a limited lifespan but can be carried forward or banked.
Todd Hubbs: That's why this is so bullish for biomass-based diesel production and feedstock usage. It's because there's a shortfall. Yes, we have carried a pretty nice bank into 2026, but based on the production we've seen through the first quarter, they've been drawing the bank because they've not been meeting the levels necessary to meet the mandate thus far this year. They're going to have to pick up production substantially to hit the mandate or carry deficits into 2027. D6 isn't the flexible place that makes up anything. It's the other categories, particularly D4. We do blend a lot of ethanol in the gasoline supply. We've seen the percentages going up over time a little bit, but we're still in that 10.5 to 10.6 range for the most part. It varies month to month on the blending percentage, and we're not going to get to 15 billion gallons. There's going to be a shortfall.
Todd Gleason: The 10.5 Todd Hubbs mentions is the variance around the 10% blend and a gallon of gasoline. It can be above or below that within a limit. Again, D4 RINs will be used to make up for the D6 shortfall. It could represent something like 520 million gallons.
Todd Hubbs: It's a lot. Depending on what kind of RIN calculation you use, like for FAME, you're getting 1.5. Some renewable diesels, 1.6, some 1.7. Basically that's what we're talking about, the backfill, the D6 shortfall. They raised the volume obligations just for biomass-based diesel significantly. When you add that D6 shortfall onto it, it's a lot of RINs that need to be generated in the D4 according to our calculations.
Todd Gleason: Hubbs says it will be interesting to see how that increase plays out in the market for oilseed crops like soybeans. You may follow the progression of the rewriting the RFS playbook articles pinned by Todd Hubbs and Scott Irwin on the farmdocdaily website.
19:19 Ag Weather with Don Day
Todd Gleason: On this Tuesday, let's take a look at the weather forecast for the Corn Belt, across the nation in fact. Don Day is here. He's with DayWeather. He is in Cheyenne, Wyoming. Joined us on this Tuesday edition of the closing market report.
Let's start in the Corn Belt. My gauge yesterday carried two inches of rainfall, and we have been progressing really well as it's related to planting progress across the Midwest. Will there be another break to help farmers continue that progress over the next week?
Don Day: Yeah, we're going to see a weather pattern shift taking the very active pattern over the last several weeks that has brought off-and-on rain to a lot of the Midwest and Corn Belt region, and shifted into areas that really could use it. We're going to see better rain chances down into the Delta, down into the southeastern portions of the United States where drought conditions have really developed. A lot of the dryness that was on drought monitors just a few weeks ago across a lot of the Midwest and Corn Belt is gone with these recent rains. Now it looks like a transition to drier weather, especially in the northern and northwest Corn Belt. We're still going to see some rain in the short term across southern areas of Illinois, Indiana, into parts of the Ohio Valley, while drying conditions will be developing across Iowa and parts of the upper Midwest.
Todd Gleason: In the Delta and the Southeast, will this rainfall go very far towards alleviating the drought conditions there?
Don Day: It's going to help, but when you get into the drought conditions down there, it's kind of like eating an elephant. You just have to nibble at it one bite at a time. This is a pretty good bite, but it's not the whole thing.
Todd Gleason: And then to the Southwest, particularly Oklahoma and Kansas, for the hard red winter wheat crop, how is that doing? Then maybe you could go north to your areas and talk about the wheat crops there too.
Don Day: Well, for portions of Oklahoma, especially central and eastern Oklahoma, there are still going to be some rain chances. Kansas is a different story, especially in the central and western counties of Kansas. That area is affected by the significant dryness coming out of the central Rockies and southern Plains areas. That also includes a good portion of Nebraska. Rainfall amounts have been modest over the last week or so, and there will be some rains late this week across portions of eastern Colorado and far western Kansas. But there is still a large area in the central and western portions of Kansas, Oklahoma, Nebraska, and eastern Colorado that are still very dry.
Todd Gleason: Hey Don, thank you so much.
Don Day: Thanks, Todd.
Todd Gleason: Don Day is with DayWeather. He is in Cheyenne, Wyoming, joined us on this Tuesday edition of the closing market report that came to you from Illinois Public Media. It is public radio for the farming world online on demand at willag.org. Right now, if you scroll down to the calendar of events and click on Thursday, you'll see the webinar hosted there by the farmdoc team. Gary Schnitkey and Nick Paulson will deal with the very tight budgets that farmers across the state of Illinois and the Midwest will have to manage going through this growing season and into the next one, and how they might do that. You can sign up for the webinar for free. Again, click on the calendar of events for Thursday of this week on our website at willag.org, or you can go to farmdocdaily.illinois.edu and click on events and webinars. I'm University of Illinois Extension's Todd Gleason.
- Naomi Blohm, TotalFarmMarketing.com
- RFS Rule's Impact on BioMass Based Diesel RINs
- Don Day, DayWeather.com
Todd Gleason: From the land-grant University in Urbana-Champaign, Illinois, this is the closing market report for the 28th day of April 2026. I'm Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Blohm at totalfarmmarketing.com out of West Bend, Wisconsin. We'll hear how the RFS rules impact biomass-based diesel RINs, and then we'll turn our attention to the weather forecast. Don Day will be here from DayWeather in Cheyenne, Wyoming, all on this Tuesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world online at willag.org. Todd Gleason's services are made available to WILL by University of Illinois Extension.
May corn for the day settled at $4.65 and a quarter, 4.5 higher. July at $4.75 and a half, up 6 and a quarter, and December corn at $4.95 and three-quarters of a bushel. A settlement price there, 6 and a quarter cents higher as well. May soybeans, $11.73, down 4 and a quarter. July, 2 and three-quarters lower at $11.89 and a quarter. And November beans, $11.67, a penny and a quarter higher. Bean meal futures down 40 cents. Soybean oil, $1.12 higher. Wheat futures for the soft red July, that's the harvest month, at $6.57 and three-quarters, up 28 cents today. And the hard red at $7.02 and a quarter, 27 cents higher.
Taking a look at some of the other numbers from the CME Group in Chicago, we'll start with the livestock figures. They show us that the nearby cattle futures are trading for the day at $253.50. That's up $4.55. Feeder cattle, a settlement price at $371.72 and a half, $4.27 and a half higher. And the lean hogs at $94.15, down 22 and a half cents. Here to make sense of some of those numbers with us is Naomi Blohm. She's at Total Farm Marketing out of West Bend, Wisconsin. Hi Naomi, thanks for being with us.
00:53 Ag Markets with Naomi Blohm
Naomi Blohm: Thanks for having me.
Todd Gleason: Let's start with the crop progress report from yesterday. What did you think of those numbers? Looks like Illinois, Indiana, Iowa are really moving along pretty good.
Naomi Blohm: Absolutely. Strong planting pace in the I-states for sure. When you look at the big picture, the nationwide corn is 25% planted. Last year at this time, we were 22% planted, and the five-year average is 19%. Beans trucking along on that planting pace at 23% planted. Last year we were 17% planted, and the five-year average is 12%. Folks are running where they can run before those rains came through. Maybe things are going to be a little bit slower this week with the recent rainfall that's happened, but we're off to a great start. A little hard to say there's any type of delay in the big picture when you've got a quarter of the corn and beans in the ground already.
Todd Gleason: What do you make of the wheat futures today? Why was there such a jump there?
Naomi Blohm: We had the crop progress readings for the winter wheat, which continued to show how winter wheat is only 30% good to excellent. A year ago, it was 49% good to excellent. When you look at the breakdown, Kansas, the number one producing state of winter wheat, was just 23% good to excellent, and 43% of the Kansas crop is poor to very poor. That kept the market supported, and then we saw additional technical buying come through for the Kansas contracts. Then the Chicago wheat contracts saw some technical buying there. What's interesting, because we're rightfully trading the quality issues for the Kansas City wheat and funds have been active with technical buying, DTN reported today that the winter wheat down at the Gulf has a $1.60 per bushel premium price to what's happening with the prices in Europe and Russia for hard wheat. Globally, we are starting to outprice ourselves competitively. We also still have a situation where global ending stocks are sufficient. I think this wheat run is definitely justified, but we're also at the point of keeping an eye on this and keeping it real, focused on some pricing here because I don't know how much more this wheat market can run.
Todd Gleason: Is the $1.60 premium at the port as much about what's happening in Kansas state as it is about the idea that wheat may not be able to make its way out of Russia and Ukraine as easily as it has during the war over the last four years?
Naomi Blohm: That's a really good point and has a lot of validity to it. We are still in the midst of that war. On the news wire today, Ukraine said they shot down more than 33,000 Russian drones during the month of March. That tells you how the war continues to escalate. Definitely, it could be countries wanting to have secure product, and they know the United States is going to be able to get the product where it needs to go on time. That could be a concern out of the Black Sea.
Todd Gleason: What do you make of the rest of the marketplace, corn, soybeans, and such?
Naomi Blohm: We are still range-bound for the old crop corn and December corn futures, knocking on $5 corn for December futures. It was interesting to note that the March contract for corn and the July 2027 contracts were able to make new highs today. We'll see if December futures for 2026 have a reason to break through that $5 handle or not. It might be hard to get through that without some specific friendly news. With the planting progress going so fast, I'm not quite sure what news it would take to justify December corn futures trading above $5. I do know there was a lot of cash movement today between old crop cash and new crop cash sales on the rally we've had, and the opportunity that's in front of folks.
Todd Gleason: Before I let you go, I do want to know in your area, have farmers been able to turn a wheel? It was so very wet early on there.
Naomi Blohm: Wisconsin is a very different animal right now compared to other places in the Midwest. We've had so much rain over the past two weeks. The area where I live, it's been five to eight inches of rain and nothing is moving. We had another half inch last night. I think some of the dairy farms are getting antsy, wanting to get some of the manure out and spread on fields. We do have drier weather coming, but we are not forecast to get above 60 degrees for the next two weeks. It's a little slow going up here, but we've been through that before.
Todd Gleason: Thanks so much. We'll talk with you again next week.
Naomi Blohm: Thank you.
Todd Gleason: That's Naomi Blohm. She is with totalfarmmarketing.com.
07:50 RFS Rule's Impact on BioMass Based Diesel RINs
Todd Gleason: The new federal rules regarding biomass-based diesel fuel production in the United States are going to push domestic production capacity to its limit this year. Next year, agricultural economists Todd Hubbs and Scott Irwin have written an article on the topic. It's part of their Rewriting the RFS Playbook series. The RFS, or the Renewable Fuel Standard, is what brought corn-based ethanol into wide use in the 2000s and early 2010s. The production of corn-based ethanol has mostly maxed out. It is, on a related note, why the United States Congress is now grappling with year-round E15, or 15% ethanol blends, for the nation's gasoline supply. However, in an odd twist, because corn-based ethanol is exported as well as being used domestically, the way it counts towards meeting mandates set in the RFS comes up short. The math here is difficult to calculate. It is what Todd Hubbs from Oklahoma State says he and Scott Irwin from the University of Illinois have been trying to bottom-line as it's related to how many gallons of biomass-based diesel fuel—think soy diesel and renewable diesel—need to be produced to meet the new renewable volume obligations released by the Trump administration. Each gallon is assigned a RIN, or Renewable Identification Number.
Todd Hubbs: The new mandates require net RIN generation for D4s to be 10.99 billion in 2026 and 11.89 billion in 2027, which is an amazing increase from the 7.1 billion required in 2025. It is very bullish for feedstock to make biomass-based diesel. It really pushes us to the limit of BBD capacity in this country. What we do in the article, Todd, is go through how we calculated our balance sheets and some of the assumptions we make. We make a lot of assumptions because you have to. There are uncertainties involved, but this is Scott and my best effort to figure out how many RINs we are going to need to meet the RVOs in the D4 category over the next two years.
Todd Gleason: By the next two years, Todd Hubbs means this year, 2026, and next year, 2027. Again, the math and the policy here are difficult. In part, this is because Congress originally assigned RIN numbers based on the desired environmental impact. The lower the number, the more desired the related fuel. Generally speaking, D6 RINs require a 20% greenhouse reduction. Ethanol made from corn is an example of a D6 RIN. D6 RINs are also the default, or one-for-one value, meaning one gallon of ethanol production is equal to one RIN. There are different denominations with different values, and the federal government limits how each may be used. While D6 RINs are the default, the government only counts them for use and trade within the domestic gasoline supply. If you put 10 gallons of 10% ethanol in your car, for instance, that's worth one RIN. That RIN generally cannot be traded to other RIN categories. The diesel fuel RINs, D4s, can. The D4 diesel fuel RIN can trade up to the D6 ethanol for gasoline RIN category. D4s assigned to soy diesel are worth 1.5 RINs, and those assigned to renewable diesel are worth even more, maybe 1.6 or 1.7. That's a lot of math. Suffice it to say, corn ethanol RINs cannot be substituted in for soy diesel or renewable diesel made from soybeans, but it can happen the other way around. I've limited the discussion here to corn and soybeans, but other crops and feedstocks are used in each RIN category. Again, here's Todd Hubbs.
Todd Hubbs: Inside the Renewable Fuel Standard, the different RIN categories are nested based off how much carbon they offset. D6 is the base RIN, typically made with corn to create ethanol. Milo is also used, and there are other feedstocks, but the vast majority is corn ethanol. They set that at 15 billion gallons in the RVOs. When they do small refinery exemptions, that goes back through the percentage standards and ups that D6 number, because it's a percent of all the gasoline and diesel consumed in the United States. When they take out some from the obligated parties for SREs and reallocate 70%, that's what they're talking about giving back in subsequent years. The reason you have to use D4s to make up the difference is the standard for D6 is above what we blend in the United States. When they first did the RFS, they thought our gasoline consumption would keep going up, and when you set it at 15 billion gallons at 10%, you would meet it with D6s. That never happened. There's a D6 shortfall because we don't blend 15 billion or 15.7 billion gallons of ethanol into our gasoline. Because of that shortfall, the next available thing to meet that obligation in the RVOs is a D4. You can use a D5, a D4, or a D3, but D4 is where all the action is because we make a lot of biomass-based diesel. Does that make sense?
Todd Gleason: Yes and no. The United States exports corn-based ethanol. RIN numbers assigned to those gallons are retired. They do not count. If they were used domestically, the D4 RINs—biomass-based diesel and renewable diesel—wouldn't necessarily need to be used to meet the annual D6 RIN mandate.
Todd Hubbs: The D6s can't move anywhere. If you generate a D6 RIN, it's going to meet the D6 category. What's nested is the D4s can meet the D6s, the D5s can meet the D6s, and a D3 can meet any of the advanced mandates plus the D6s if necessary. We rarely exceed the quantity necessary to meet the volume obligation in D3s. The idea is, when you have this shortfall because we're not blending enough ethanol into our domestic gasoline supply, what comes in to make up the difference is D4s.
Todd Gleason: It is this nesting, using D4 RINs to meet D6 mandates, along with the limited biomass-based and renewable diesel production in the United States, that has Irwin and Hubbs thinking about the marketplace. RINs have a limited lifespan but can be carried forward or banked.
Todd Hubbs: That's why this is so bullish for biomass-based diesel production and feedstock usage. It's because there's a shortfall. Yes, we have carried a pretty nice bank into 2026, but based on the production we've seen through the first quarter, they've been drawing the bank because they've not been meeting the levels necessary to meet the mandate thus far this year. They're going to have to pick up production substantially to hit the mandate or carry deficits into 2027. D6 isn't the flexible place that makes up anything. It's the other categories, particularly D4. We do blend a lot of ethanol in the gasoline supply. We've seen the percentages going up over time a little bit, but we're still in that 10.5 to 10.6 range for the most part. It varies month to month on the blending percentage, and we're not going to get to 15 billion gallons. There's going to be a shortfall.
Todd Gleason: The 10.5 Todd Hubbs mentions is the variance around the 10% blend and a gallon of gasoline. It can be above or below that within a limit. Again, D4 RINs will be used to make up for the D6 shortfall. It could represent something like 520 million gallons.
Todd Hubbs: It's a lot. Depending on what kind of RIN calculation you use, like for FAME, you're getting 1.5. Some renewable diesels, 1.6, some 1.7. Basically that's what we're talking about, the backfill, the D6 shortfall. They raised the volume obligations just for biomass-based diesel significantly. When you add that D6 shortfall onto it, it's a lot of RINs that need to be generated in the D4 according to our calculations.
Todd Gleason: Hubbs says it will be interesting to see how that increase plays out in the market for oilseed crops like soybeans. You may follow the progression of the rewriting the RFS playbook articles pinned by Todd Hubbs and Scott Irwin on the farmdocdaily website.
19:19 Ag Weather with Don Day
Todd Gleason: On this Tuesday, let's take a look at the weather forecast for the Corn Belt, across the nation in fact. Don Day is here. He's with DayWeather. He is in Cheyenne, Wyoming. Joined us on this Tuesday edition of the closing market report.
Let's start in the Corn Belt. My gauge yesterday carried two inches of rainfall, and we have been progressing really well as it's related to planting progress across the Midwest. Will there be another break to help farmers continue that progress over the next week?
Don Day: Yeah, we're going to see a weather pattern shift taking the very active pattern over the last several weeks that has brought off-and-on rain to a lot of the Midwest and Corn Belt region, and shifted into areas that really could use it. We're going to see better rain chances down into the Delta, down into the southeastern portions of the United States where drought conditions have really developed. A lot of the dryness that was on drought monitors just a few weeks ago across a lot of the Midwest and Corn Belt is gone with these recent rains. Now it looks like a transition to drier weather, especially in the northern and northwest Corn Belt. We're still going to see some rain in the short term across southern areas of Illinois, Indiana, into parts of the Ohio Valley, while drying conditions will be developing across Iowa and parts of the upper Midwest.
Todd Gleason: In the Delta and the Southeast, will this rainfall go very far towards alleviating the drought conditions there?
Don Day: It's going to help, but when you get into the drought conditions down there, it's kind of like eating an elephant. You just have to nibble at it one bite at a time. This is a pretty good bite, but it's not the whole thing.
Todd Gleason: And then to the Southwest, particularly Oklahoma and Kansas, for the hard red winter wheat crop, how is that doing? Then maybe you could go north to your areas and talk about the wheat crops there too.
Don Day: Well, for portions of Oklahoma, especially central and eastern Oklahoma, there are still going to be some rain chances. Kansas is a different story, especially in the central and western counties of Kansas. That area is affected by the significant dryness coming out of the central Rockies and southern Plains areas. That also includes a good portion of Nebraska. Rainfall amounts have been modest over the last week or so, and there will be some rains late this week across portions of eastern Colorado and far western Kansas. But there is still a large area in the central and western portions of Kansas, Oklahoma, Nebraska, and eastern Colorado that are still very dry.
Todd Gleason: Hey Don, thank you so much.
Don Day: Thanks, Todd.
Todd Gleason: Don Day is with DayWeather. He is in Cheyenne, Wyoming, joined us on this Tuesday edition of the closing market report that came to you from Illinois Public Media. It is public radio for the farming world online on demand at willag.org. Right now, if you scroll down to the calendar of events and click on Thursday, you'll see the webinar hosted there by the farmdoc team. Gary Schnitkey and Nick Paulson will deal with the very tight budgets that farmers across the state of Illinois and the Midwest will have to manage going through this growing season and into the next one, and how they might do that. You can sign up for the webinar for free. Again, click on the calendar of events for Thursday of this week on our website at willag.org, or you can go to farmdocdaily.illinois.edu and click on events and webinars. I'm University of Illinois Extension's Todd Gleason.