Episode Number
10424
Episode Show Notes / Description
Hosted by Todd Gleason, the August 27, 2026, edition of the *Closing Market Report* examines agricultural commodity trends, biofuels policy, and late-summer weather. Matt Bennett of AgMarket.net reviews recent market rallies and advises producers to utilize incremental risk management strategies, while noting that global wheat markets are reacting strongly to escalating Russia-Ukraine tensions. Agricultural economist Scott Irwin discusses the Renewable Fuel Standard and the potential economic fallout if the Trump administration grants more Small Refinery Exemptions (SREs) for 2025. Irwin warns that reversing biomass-based diesel mandates would severely cut soybean oil usage, potentially costing soybean producers billions of dollars. Finally, meteorologist Mike Tannura of Tstorm Weather forecasts a historic, late-season heat wave across the Corn Belt, warning that an impending string of days with temperatures in the 90s will challenge late-stage grain fill and complicate analysts' final yield expectations. The broadcast concludes by highlighting upcoming *farmdoc* webinars and the *Commodity Week* program.
02:08 Ag Markets with Matt Bennett, AgMarket.net
09:47 SREs and the Price of Soybeans
17:09 Ag Weather with Mike Tannura, Tstorm.net
02:08 Ag Markets with Matt Bennett, AgMarket.net
09:47 SREs and the Price of Soybeans
17:09 Ag Weather with Mike Tannura, Tstorm.net
Transcript
cmr260827
Hosted by Todd Gleason, the August 27, 2026, edition of the *Closing Market Report* examines agricultural commodity trends, biofuels policy, and late-summer weather. Matt Bennett of AgMarket.net reviews recent market rallies and advises producers to utilize incremental risk management strategies, while noting that global wheat markets are reacting strongly to escalating Russia-Ukraine tensions. Agricultural economist Scott Irwin discusses the Renewable Fuel Standard and the potential economic fallout if the Trump administration grants more Small Refinery Exemptions (SREs) for 2025. Irwin warns that reversing biomass-based diesel mandates would severely cut soybean oil usage, potentially costing soybean producers billions of dollars. Finally, meteorologist Mike Tannura of Tstorm Weather forecasts a historic, late-season heat wave across the Corn Belt, warning that an impending string of days with temperatures in the 90s will challenge late-stage grain fill and complicate analysts' final yield expectations. The broadcast concludes by highlighting upcoming *farmdoc* webinars and the *Commodity Week* program.
02:08 Ag Markets with Matt Bennett, AgMarket.net
09:47 SREs and the Price of Soybeans
17:09 Ag Weather with Mike Tannura, Tstorm.net
---
Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the Closing Market Report. It is the 27th day of August 2026. I’m extension’s Todd Gleason. Happy 38th anniversary to my lovely bride, Clarianne. Coming up, we’ll talk about the commodity markets with Matt Bennett of AgMarket.net. Scott Irwin, agricultural economist from the University of Illinois, will join us to talk about SREs, that’s small refinery exemptions. Usually, that has to do with corn; not today. Things happening in DC have to do with soybeans, the RFS, SREs, and the RVO. Then we’ll turn our attention to the weather forecast. As we close out our time together, we’ll talk with Mike Tannura. He is at Tstorm Weather, Tstorm.net online, during this Thursday edition of the Closing Market Report from Illinois Public Media.
Announce: Todd Gleason’s services are made available to WILL by University of Illinois Extension.
02:08 Ag Markets with Matt Bennett, AgMarket.net
Todd Gleason: September corn for the day settled at $5.10 and a quarter cents a bushel, down 3 and 3/4. New crop December, 3 lower; settlement price there at $5.33 and a half. And the March at $5.47 and a quarter, down 3 and a half cents. September beans up 2 and a quarter, finished $12.56 and a half. November new crop at $12.68, 2 cents higher. January soybeans, $12.83, up 2 and a quarter. Bean meal, $1.50 higher. Bean oil, 78 cents higher; it finished at $68. Wheat futures: soft red December up 12 and a half cents, a settlement price at $7.60 and 3/4. And the hard red December at $8.22, up 13 and a quarter cents. Live cattle futures, $2.15 higher. Feeders up $3.82 and a half. And lean hogs, 27 and a half cents lower; that for 100 pounds. Crude oil on the WTI, $1.47 higher at $83.69 a barrel. And the wholesale price of gasoline up 2 and 2/10 of a cent at $2.98 and 4/10 of a cent per gallon. You’re listening to the Closing Market Report. Matt Bennett from AgMarket.net now joins us from Becknology Days. This is put on by Beck’s Hybrids. He’s been traveling with them quite a little bit this summer. Where are you today, actually?
Matt Bennett: Over in Atlanta, Indiana at their headquarters. So probably 5,000 to 6,000 people here today. It was quite a crowd, but the weather is perfect for it.
Todd Gleason: What did you tell them?
Matt Bennett: I told them everything has looked good here. We’ve ramped up, best prices we’ve seen in three years, and you’ve got to pay attention to that. It doesn’t mean you step in and sell 50%, but maybe you get to 50% if you’re already at 40. Incremental sales at profitable levels into a rally makes quite a bit of sense to me. I just don’t want people getting too bulled up. There are reasons to think we could go quite a bit higher depending on world weather, but layering in sales so you know you’re going to have a really good year and be able to sleep at night—not worrying about black swan events—is a much preferred risk management strategy.
Todd Gleason: You mentioned a couple of things there that have me wondering. What did the folks at Beck’s, maybe the agronomists or just people in general, tell you about the size of their corn crop and expected yields?
Matt Bennett: There’s variability. One thing I’ve heard a lot since the Pro Farmer tour came out is that people decided to get out into their fields a little more than they had been to take a look at what they really have out there. Yes, there’s great corn in places, but a lot of folks have said they had more variability than they expected. Some of the agronomists said they’ve seen nitrogen issues—nitrogen loss, if you will—pretty prevalent in different areas. I do think the crop is a decent size, but at this stage of the game, I’d have to lean towards a number under 180, nothing near Pro Farmer. But that’s just my opinion.
Todd Gleason: Pro Farmer leans a lot on Illinois and Indiana. I had some conversations with the crop scientists at the University of Illinois, particularly after some Logan County numbers came out where they were using 75k as the default for kernel size rather than 80. The agronomist thinks that’s right. Emerson Nafziger says if that kernel is not only deep—because they believe grain fill is going to be really good—but also wide, you should drop it down to 70. That can make a big difference in the size of this crop, something like 12 bushels every time you go 5,000 kernels. Did the agronomists at Beck’s talk about grain fill and what they think it might look like?
Matt Bennett: Yes, I think the thought process is that the stuff that’s good is going to finish really well. The stuff that’s been hurt, for instance by saturated soils in June or nitrogen loss, is probably not going to have a chance to benefit from that same sort of environment. A lot of it has been hurt to the point that it’s not going to get better. So I still think there will be issues in the hurt stuff, whereas the really good corn is probably going to be a pleasant surprise. Lately, we’ve all woken up to mornings that are borderline chilly. You couldn’t really ask for a better situation. Obviously, it was way too hot and dry for a lot of us in July. The bottom line is we’re going to finish really well, so we should be able to hold onto kernels, build that kernel size, and that should bode well for a lot of people.
Todd Gleason: The wheat market has been leading this week. Why is that the case?
Matt Bennett: Russia and Ukraine are certainly into it to a stronger degree with reports that Russia was bombing more civilian areas yesterday and said they were ready and willing to escalate. That definitely spooked the market for good reason. The wheat is still there, Todd; it’s going to make its way to the world market at some time, but we’ve severely disrupted the flow of world wheat. I would look at this rally very closely. If I was a grower that loves planting wheat and maybe backed off the last year or two, you’re looking at July 2027 wheat at $7.70. That’s just not a price we’ve been able to hedge out for quite some time.
Todd Gleason: Turn your attention to soybeans. We’ll hear more about this from Scott Irwin in a moment, but because you’re in the midst of so many people, I suspect DC policy has come up, specifically small refinery exemptions. What do we know from the people you’re talking to as it relates to the Trump administration’s thoughts on how many of those might be granted for last year, 2025?
Matt Bennett: I’ve asked several people this question who I feel would be able to give me a good answer, and it sounds like there might be more granted than the market wants to see. I don’t have anything more definitive than that. The problem, of course, is there’s a lot of pressure on all sides. Clearly, we’ve seen that impact the soybean oil market to a degree this week. You start out the week down a couple of dollars and then flounder around the rest of the week. The bottom line is the market didn’t like the tone, and soybean oil is $10 off where we were just three or four weeks ago. That’s a really good indication of why.
Todd Gleason: How much pressure does that put on soybeans themselves, and what do folks think about their soybean crop in that same breath?
Matt Bennett: There’s no doubt. You look at the Pro Farmer crop tour and they were at 53.3. I would assume that even with low pod counts—last year you had high pod counts and finished super dry; this year lower pod counts across the board for the most part—you’re finishing wet. That’s exactly what you want for beans. Some of these pods are going to be bursting at the seams. I have to think this crop is plenty big enough. However, I do think the trade is very focused on world weather and this super El Nino event. How is it going to impact South American production? I think that’s on traders’ minds, and part of the reason why this bean crop is viewed as fairly large, yet the market has been able to hang right in there.
Todd Gleason: Thank you very much, I appreciate it.
Matt Bennett: Absolutely, thanks, Todd.
Todd Gleason: That’s Matt Bennett. He is with AgMarket.net.
09:47 SREs and the Price of Soybeans
Todd Gleason: You’re listening to the Closing Market Report from Illinois Public Media on this Thursday afternoon. This morning, I was in Mumford Hall to host a webinar with Gary Schnitkey, Luke Worrell, and Raechel Sehi about cash rents and the price of farmland. It’s up on the YouTube website for the FarmDoc team at youtube.com/@farmdoc, or go to farmdocdaily.illinois.edu in the webinars and events section. Being on campus gave me the opportunity to drop into Scott Irwin’s office. He’s an agricultural economist, and I asked him about the SRE debate taking place in Washington DC. First, I asked him to explain the policy to me.
Scott Irwin: The US Renewable Fuel Standard sets mandates for different kinds of biofuels. The one really in question is called biomass-based diesel, which is made up of renewable diesel and FAME biodiesel. The RFS has annual numbers called RVOs that set the minimum amount for those two biofuels that can be blended into diesel in the US. Then there is this trapdoor called small refinery exemptions, where you can exempt smaller refineries from these RVO requirements. This has been a sore point in implementing the annual RVOs for more than a decade. The current controversy is about the possibility that the Trump administration for 2025 will issue a lot more of these exemptions than were built into the rulemaking finalized last March.
Todd Gleason: Up front, RVOs, SREs, the small refinery exemptions. You said it had to do with soybeans. Usually, we talk about ethanol, not biomass-based diesel fuels.
Scott Irwin: Right. The reason for that, Todd, is that this rulemaking had as its central purpose for 2026 and 2027 to get the US biomass-based diesel sector back on track. It had been growing rapidly from 2020 through 2023 and hit a wall. This rulemaking finalized in March was supposed to provide strong incentives to get that sector expanding again. Everything had been looking good until late last week, when it appears—without formal confirmation—that the Trump administration is doing a U-turn on the number of SREs that will be awarded.
Todd Gleason: What’s the potential economic impact?
Scott Irwin: On the fuel side, meaning for drivers at the pump, very little. Perhaps a reduction of two or three cents per gallon for gasoline and diesel, maybe up to a nickel. But it would have dramatic impacts on the soybean sector. My estimates show it would reduce US biomass-based diesel production in 2026 by about a billion gallons. We would likely cut soybean oil usage for making biomass-based diesel substantially, reversing much of the incentives put in place in the March final rulemaking. This reflects the ongoing political battles between Big Ag and Big Oil on the implementation of the RFS.
Todd Gleason: A couple of points of clarification. Biomass-based diesel—is that soy diesel, renewable diesel, or both?
Scott Irwin: It’s both. Renewable diesel and biodiesel are made with different processes. Biodiesel is the heaviest user of soybean oil as a feedstock; about 70% of biodiesel is made from soybean oil. The share is much lower for renewable diesel, but it’s still large. That’s the connection to the soybean sector.
Todd Gleason: This is the function you believe is currently supporting the price of soybeans?
Scott Irwin: Absolutely. Traditionally, soybean oil accounted for about a third of the crush value of a bushel of soybeans. Now it had been running 50 to 60%. It’s definitely driving the bus. Depending on the estimates, it’s added a dollar a bushel to current soybean prices, potentially up to two dollars. If you reverse those incentives, you’re talking about billions of dollars of lost revenue for soybean producers.
Todd Gleason: And it will have a direct impact on ADM’s decisions to expand its soybean crush facilities across the Midwest over the next three years?
Scott Irwin: Absolutely. Seemingly, this is an arcane thing, but so much turns on it in terms of the immediate economic prospects for soybean production and processors. There are intense conversations going on in Washington DC about how this may or may not be implemented. A lot is at stake.
Todd Gleason: Thank you very much, Scott. I appreciate it.
Scott Irwin: Always a pleasure.
Todd Gleason: I spoke with agricultural economist Scott Irwin earlier today in Mumford Hall on the Urbana-Champaign campus of the University of Illinois.
17:09 Ag Weather with Mike Tannura, Tstorm.net
Todd Gleason: We’ll turn our attention now to the growing regions across the planet and the weather in each of them. Mike Tannura, president and CEO of Tstorm Weather (tstorm.net), joins us. Hi Mike, thank you for being with us again.
Mike Tannura: Hey Todd, thanks again for having me.
Todd Gleason: Let’s start with the weather we’ve already had this week. It’s been seasonable and magnificent with sunshine and drier weather. Has it dried out the Corn Belt?
Mike Tannura: Not too much, because of the rain we had a couple of weeks ago. While some far northern and southern areas are a little dry, most areas are in the middle. Maybe 25% of the US corn and soybean crops are a little dry as of today.
Todd Gleason: That’s the precipitation. What about the temperatures in the last several days?
Mike Tannura: They’ve been fine. We’ve had highs in the 70s and 80s and lows in the 50s and 60s, so most corn and soybeans have been doing well. The only exception would be the southern and far southwestern growing areas; we’ve been in the 100s for most of this week in Texas, but that’s only about 2% of the US corn crop.
Todd Gleason: Looking forward, what do you see for the growing regions across the United States?
Mike Tannura: This is where it gets interesting. The next two days will be fine with pleasant temperatures, but there will be a rapid change to heat this weekend. This heat wave is going to last for a while. We’ll see about seven straight days with highs easily in the 90s and lows in the 60s and 70s, which is unusual for late August and early September. There might be a slight break a week from now, but more of the same will likely follow. For the US corn and soybean crops as a whole, the next 14 days are going to be the warmest in more than 48 years of records. The only similar years would be 2013, 1980, and 1990.
Todd Gleason: Is there anything you can say about the grain fill period through August and what that might mean for the crop?
Mike Tannura: If we look at the next 14 days and the past 16 days—basically the period from August 10th to September 10th—that would end up being around the second warmest of that entire period going back to 1979. This heat wave is going to cause some sharp temperature deviations to the hot side. The tricky part is figuring out if this heat wave is enough to override the favorable weather we saw earlier in the season, or if it will drag the whole crop southward. That’s a tricky question that analysts, including myself, will try to answer once we see a little more weather.
Todd Gleason: We’ll ask you more about that next week. Thank you very much, Mike.
Mike Tannura: Sounds great. Thank you, Todd.
Todd Gleason: Mike Tannura is the president and CEO of Tstorm Weather. A couple of reminders: our Commodity Week program will be recorded later today and posted to willag.org by 6:00 this evening. Secondly, this morning’s webinar on cash rents for 2027 and the price of farmland should be posted at youtube.com/@farmdoc. You can also visit farmdocdaily.illinois.edu to sign up for next Thursday’s update on crop budgets with Nick Paulson and Gary Schnitkey. Thank you for joining us this afternoon on the Closing Market Report. I’m Todd Gleason.
Hosted by Todd Gleason, the August 27, 2026, edition of the *Closing Market Report* examines agricultural commodity trends, biofuels policy, and late-summer weather. Matt Bennett of AgMarket.net reviews recent market rallies and advises producers to utilize incremental risk management strategies, while noting that global wheat markets are reacting strongly to escalating Russia-Ukraine tensions. Agricultural economist Scott Irwin discusses the Renewable Fuel Standard and the potential economic fallout if the Trump administration grants more Small Refinery Exemptions (SREs) for 2025. Irwin warns that reversing biomass-based diesel mandates would severely cut soybean oil usage, potentially costing soybean producers billions of dollars. Finally, meteorologist Mike Tannura of Tstorm Weather forecasts a historic, late-season heat wave across the Corn Belt, warning that an impending string of days with temperatures in the 90s will challenge late-stage grain fill and complicate analysts' final yield expectations. The broadcast concludes by highlighting upcoming *farmdoc* webinars and the *Commodity Week* program.
02:08 Ag Markets with Matt Bennett, AgMarket.net
09:47 SREs and the Price of Soybeans
17:09 Ag Weather with Mike Tannura, Tstorm.net
---
Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the Closing Market Report. It is the 27th day of August 2026. I’m extension’s Todd Gleason. Happy 38th anniversary to my lovely bride, Clarianne. Coming up, we’ll talk about the commodity markets with Matt Bennett of AgMarket.net. Scott Irwin, agricultural economist from the University of Illinois, will join us to talk about SREs, that’s small refinery exemptions. Usually, that has to do with corn; not today. Things happening in DC have to do with soybeans, the RFS, SREs, and the RVO. Then we’ll turn our attention to the weather forecast. As we close out our time together, we’ll talk with Mike Tannura. He is at Tstorm Weather, Tstorm.net online, during this Thursday edition of the Closing Market Report from Illinois Public Media.
Announce: Todd Gleason’s services are made available to WILL by University of Illinois Extension.
02:08 Ag Markets with Matt Bennett, AgMarket.net
Todd Gleason: September corn for the day settled at $5.10 and a quarter cents a bushel, down 3 and 3/4. New crop December, 3 lower; settlement price there at $5.33 and a half. And the March at $5.47 and a quarter, down 3 and a half cents. September beans up 2 and a quarter, finished $12.56 and a half. November new crop at $12.68, 2 cents higher. January soybeans, $12.83, up 2 and a quarter. Bean meal, $1.50 higher. Bean oil, 78 cents higher; it finished at $68. Wheat futures: soft red December up 12 and a half cents, a settlement price at $7.60 and 3/4. And the hard red December at $8.22, up 13 and a quarter cents. Live cattle futures, $2.15 higher. Feeders up $3.82 and a half. And lean hogs, 27 and a half cents lower; that for 100 pounds. Crude oil on the WTI, $1.47 higher at $83.69 a barrel. And the wholesale price of gasoline up 2 and 2/10 of a cent at $2.98 and 4/10 of a cent per gallon. You’re listening to the Closing Market Report. Matt Bennett from AgMarket.net now joins us from Becknology Days. This is put on by Beck’s Hybrids. He’s been traveling with them quite a little bit this summer. Where are you today, actually?
Matt Bennett: Over in Atlanta, Indiana at their headquarters. So probably 5,000 to 6,000 people here today. It was quite a crowd, but the weather is perfect for it.
Todd Gleason: What did you tell them?
Matt Bennett: I told them everything has looked good here. We’ve ramped up, best prices we’ve seen in three years, and you’ve got to pay attention to that. It doesn’t mean you step in and sell 50%, but maybe you get to 50% if you’re already at 40. Incremental sales at profitable levels into a rally makes quite a bit of sense to me. I just don’t want people getting too bulled up. There are reasons to think we could go quite a bit higher depending on world weather, but layering in sales so you know you’re going to have a really good year and be able to sleep at night—not worrying about black swan events—is a much preferred risk management strategy.
Todd Gleason: You mentioned a couple of things there that have me wondering. What did the folks at Beck’s, maybe the agronomists or just people in general, tell you about the size of their corn crop and expected yields?
Matt Bennett: There’s variability. One thing I’ve heard a lot since the Pro Farmer tour came out is that people decided to get out into their fields a little more than they had been to take a look at what they really have out there. Yes, there’s great corn in places, but a lot of folks have said they had more variability than they expected. Some of the agronomists said they’ve seen nitrogen issues—nitrogen loss, if you will—pretty prevalent in different areas. I do think the crop is a decent size, but at this stage of the game, I’d have to lean towards a number under 180, nothing near Pro Farmer. But that’s just my opinion.
Todd Gleason: Pro Farmer leans a lot on Illinois and Indiana. I had some conversations with the crop scientists at the University of Illinois, particularly after some Logan County numbers came out where they were using 75k as the default for kernel size rather than 80. The agronomist thinks that’s right. Emerson Nafziger says if that kernel is not only deep—because they believe grain fill is going to be really good—but also wide, you should drop it down to 70. That can make a big difference in the size of this crop, something like 12 bushels every time you go 5,000 kernels. Did the agronomists at Beck’s talk about grain fill and what they think it might look like?
Matt Bennett: Yes, I think the thought process is that the stuff that’s good is going to finish really well. The stuff that’s been hurt, for instance by saturated soils in June or nitrogen loss, is probably not going to have a chance to benefit from that same sort of environment. A lot of it has been hurt to the point that it’s not going to get better. So I still think there will be issues in the hurt stuff, whereas the really good corn is probably going to be a pleasant surprise. Lately, we’ve all woken up to mornings that are borderline chilly. You couldn’t really ask for a better situation. Obviously, it was way too hot and dry for a lot of us in July. The bottom line is we’re going to finish really well, so we should be able to hold onto kernels, build that kernel size, and that should bode well for a lot of people.
Todd Gleason: The wheat market has been leading this week. Why is that the case?
Matt Bennett: Russia and Ukraine are certainly into it to a stronger degree with reports that Russia was bombing more civilian areas yesterday and said they were ready and willing to escalate. That definitely spooked the market for good reason. The wheat is still there, Todd; it’s going to make its way to the world market at some time, but we’ve severely disrupted the flow of world wheat. I would look at this rally very closely. If I was a grower that loves planting wheat and maybe backed off the last year or two, you’re looking at July 2027 wheat at $7.70. That’s just not a price we’ve been able to hedge out for quite some time.
Todd Gleason: Turn your attention to soybeans. We’ll hear more about this from Scott Irwin in a moment, but because you’re in the midst of so many people, I suspect DC policy has come up, specifically small refinery exemptions. What do we know from the people you’re talking to as it relates to the Trump administration’s thoughts on how many of those might be granted for last year, 2025?
Matt Bennett: I’ve asked several people this question who I feel would be able to give me a good answer, and it sounds like there might be more granted than the market wants to see. I don’t have anything more definitive than that. The problem, of course, is there’s a lot of pressure on all sides. Clearly, we’ve seen that impact the soybean oil market to a degree this week. You start out the week down a couple of dollars and then flounder around the rest of the week. The bottom line is the market didn’t like the tone, and soybean oil is $10 off where we were just three or four weeks ago. That’s a really good indication of why.
Todd Gleason: How much pressure does that put on soybeans themselves, and what do folks think about their soybean crop in that same breath?
Matt Bennett: There’s no doubt. You look at the Pro Farmer crop tour and they were at 53.3. I would assume that even with low pod counts—last year you had high pod counts and finished super dry; this year lower pod counts across the board for the most part—you’re finishing wet. That’s exactly what you want for beans. Some of these pods are going to be bursting at the seams. I have to think this crop is plenty big enough. However, I do think the trade is very focused on world weather and this super El Nino event. How is it going to impact South American production? I think that’s on traders’ minds, and part of the reason why this bean crop is viewed as fairly large, yet the market has been able to hang right in there.
Todd Gleason: Thank you very much, I appreciate it.
Matt Bennett: Absolutely, thanks, Todd.
Todd Gleason: That’s Matt Bennett. He is with AgMarket.net.
09:47 SREs and the Price of Soybeans
Todd Gleason: You’re listening to the Closing Market Report from Illinois Public Media on this Thursday afternoon. This morning, I was in Mumford Hall to host a webinar with Gary Schnitkey, Luke Worrell, and Raechel Sehi about cash rents and the price of farmland. It’s up on the YouTube website for the FarmDoc team at youtube.com/@farmdoc, or go to farmdocdaily.illinois.edu in the webinars and events section. Being on campus gave me the opportunity to drop into Scott Irwin’s office. He’s an agricultural economist, and I asked him about the SRE debate taking place in Washington DC. First, I asked him to explain the policy to me.
Scott Irwin: The US Renewable Fuel Standard sets mandates for different kinds of biofuels. The one really in question is called biomass-based diesel, which is made up of renewable diesel and FAME biodiesel. The RFS has annual numbers called RVOs that set the minimum amount for those two biofuels that can be blended into diesel in the US. Then there is this trapdoor called small refinery exemptions, where you can exempt smaller refineries from these RVO requirements. This has been a sore point in implementing the annual RVOs for more than a decade. The current controversy is about the possibility that the Trump administration for 2025 will issue a lot more of these exemptions than were built into the rulemaking finalized last March.
Todd Gleason: Up front, RVOs, SREs, the small refinery exemptions. You said it had to do with soybeans. Usually, we talk about ethanol, not biomass-based diesel fuels.
Scott Irwin: Right. The reason for that, Todd, is that this rulemaking had as its central purpose for 2026 and 2027 to get the US biomass-based diesel sector back on track. It had been growing rapidly from 2020 through 2023 and hit a wall. This rulemaking finalized in March was supposed to provide strong incentives to get that sector expanding again. Everything had been looking good until late last week, when it appears—without formal confirmation—that the Trump administration is doing a U-turn on the number of SREs that will be awarded.
Todd Gleason: What’s the potential economic impact?
Scott Irwin: On the fuel side, meaning for drivers at the pump, very little. Perhaps a reduction of two or three cents per gallon for gasoline and diesel, maybe up to a nickel. But it would have dramatic impacts on the soybean sector. My estimates show it would reduce US biomass-based diesel production in 2026 by about a billion gallons. We would likely cut soybean oil usage for making biomass-based diesel substantially, reversing much of the incentives put in place in the March final rulemaking. This reflects the ongoing political battles between Big Ag and Big Oil on the implementation of the RFS.
Todd Gleason: A couple of points of clarification. Biomass-based diesel—is that soy diesel, renewable diesel, or both?
Scott Irwin: It’s both. Renewable diesel and biodiesel are made with different processes. Biodiesel is the heaviest user of soybean oil as a feedstock; about 70% of biodiesel is made from soybean oil. The share is much lower for renewable diesel, but it’s still large. That’s the connection to the soybean sector.
Todd Gleason: This is the function you believe is currently supporting the price of soybeans?
Scott Irwin: Absolutely. Traditionally, soybean oil accounted for about a third of the crush value of a bushel of soybeans. Now it had been running 50 to 60%. It’s definitely driving the bus. Depending on the estimates, it’s added a dollar a bushel to current soybean prices, potentially up to two dollars. If you reverse those incentives, you’re talking about billions of dollars of lost revenue for soybean producers.
Todd Gleason: And it will have a direct impact on ADM’s decisions to expand its soybean crush facilities across the Midwest over the next three years?
Scott Irwin: Absolutely. Seemingly, this is an arcane thing, but so much turns on it in terms of the immediate economic prospects for soybean production and processors. There are intense conversations going on in Washington DC about how this may or may not be implemented. A lot is at stake.
Todd Gleason: Thank you very much, Scott. I appreciate it.
Scott Irwin: Always a pleasure.
Todd Gleason: I spoke with agricultural economist Scott Irwin earlier today in Mumford Hall on the Urbana-Champaign campus of the University of Illinois.
17:09 Ag Weather with Mike Tannura, Tstorm.net
Todd Gleason: We’ll turn our attention now to the growing regions across the planet and the weather in each of them. Mike Tannura, president and CEO of Tstorm Weather (tstorm.net), joins us. Hi Mike, thank you for being with us again.
Mike Tannura: Hey Todd, thanks again for having me.
Todd Gleason: Let’s start with the weather we’ve already had this week. It’s been seasonable and magnificent with sunshine and drier weather. Has it dried out the Corn Belt?
Mike Tannura: Not too much, because of the rain we had a couple of weeks ago. While some far northern and southern areas are a little dry, most areas are in the middle. Maybe 25% of the US corn and soybean crops are a little dry as of today.
Todd Gleason: That’s the precipitation. What about the temperatures in the last several days?
Mike Tannura: They’ve been fine. We’ve had highs in the 70s and 80s and lows in the 50s and 60s, so most corn and soybeans have been doing well. The only exception would be the southern and far southwestern growing areas; we’ve been in the 100s for most of this week in Texas, but that’s only about 2% of the US corn crop.
Todd Gleason: Looking forward, what do you see for the growing regions across the United States?
Mike Tannura: This is where it gets interesting. The next two days will be fine with pleasant temperatures, but there will be a rapid change to heat this weekend. This heat wave is going to last for a while. We’ll see about seven straight days with highs easily in the 90s and lows in the 60s and 70s, which is unusual for late August and early September. There might be a slight break a week from now, but more of the same will likely follow. For the US corn and soybean crops as a whole, the next 14 days are going to be the warmest in more than 48 years of records. The only similar years would be 2013, 1980, and 1990.
Todd Gleason: Is there anything you can say about the grain fill period through August and what that might mean for the crop?
Mike Tannura: If we look at the next 14 days and the past 16 days—basically the period from August 10th to September 10th—that would end up being around the second warmest of that entire period going back to 1979. This heat wave is going to cause some sharp temperature deviations to the hot side. The tricky part is figuring out if this heat wave is enough to override the favorable weather we saw earlier in the season, or if it will drag the whole crop southward. That’s a tricky question that analysts, including myself, will try to answer once we see a little more weather.
Todd Gleason: We’ll ask you more about that next week. Thank you very much, Mike.
Mike Tannura: Sounds great. Thank you, Todd.
Todd Gleason: Mike Tannura is the president and CEO of Tstorm Weather. A couple of reminders: our Commodity Week program will be recorded later today and posted to willag.org by 6:00 this evening. Secondly, this morning’s webinar on cash rents for 2027 and the price of farmland should be posted at youtube.com/@farmdoc. You can also visit farmdocdaily.illinois.edu to sign up for next Thursday’s update on crop budgets with Nick Paulson and Gary Schnitkey. Thank you for joining us this afternoon on the Closing Market Report. I’m Todd Gleason.