A surge in U.S. biofuel policy developments is reshaping the corn and soybean oil markets, with implications for North American growers watching both prices and policy unfold.
Susan Stroud of No Bull Ag says that news this week on momentum behind year-round E15, the overhaul of clean fuel incentives, and the uncertainty surrounding the EPA’s final decisions on renewable volume obligations are all factoring in to soy, canola, and corn markets.
Related: Changes to Clean Fuel regs don't go far enough, say canola organizations
After years of limited discussion, year-round, country-wide E15 — a gasoline blend containing 15% ethanol — has gained significant political traction. The U.S. president voiced support for the move toward year-round sales this week while on a tour in Iowa, but Stroud urges caution on short-term expectations.
“Every percent of ethanol blend matters,” she says, noting that a 1% increase in the national blend rate equates to nearly half a billion bushels of corn demand — about the size of North Dakota’s corn crop. Still, she warns, “E15 won’t fix today’s carryout problems. It’s a long-term play.”
Stroud says that it's important to remember that U.S. ethanol plants have broken multiple weekly production records in the current marketing year. Much of that production is being buoyed by a favourable export environment, with U.S. Gulf ethanol priced at a record discount to Brazilian product.
The 45Z clean fuel production credit — that replaces the $1 blending tax credit — is having a ripple effect across the oilseed sector. Previously criticized for penalizing some feed stocks, the revamped policy now places domestic feedstocks like soybean and canola oil on more competitive footing by removing indirect land use penalties.
According to Stroud, 45Z “nearly triples” the value of the tax credit for renewable diesel made from soybean oil and gives corn ethanol an added margin boost of around 11 cents per gallon. But there are still questions around the renewal of RVOs — and those final volumes have yet to be set.
Prices for soybean oil have begun climbing again amid speculation the EPA will enforce a controversial “RIN haircut” — a 50% reduction in credits for fuels made from imported feedstocks. The proposal, if enacted, would disadvantage foreign-sourced fats and oils, including Chinese used cooking oil and tallow, while boosting demand for U.S.-grown alternatives.
The administration is linking the influx of foreign feedstocks with lower U.S. farm incomes, Stroud says, referencing EPA language that ties biofuel imports directly to economic harm for American producers.
Canadian canola oil is back in the mix under the new 45Z framework, which recognizes Canadian, U.S., and Mexican feedstocks as “domestic," she says. However, the pending EPA rule could still treat Canadian canola as foreign, depending on how the RIN haircut is applied.
While policy dominates headlines, logistical hurdles continue to weigh on actual market movement. With snow, ice, and low river levels hampering U.S. exports, the outlook for soybean shipments remains cloudy. Market watchers are also monitoring whether China follows through on an additional 25 million metric tonne soybean purchase rumoured but not confirmed.
Ultimately, Stroud says that policy remains the single most important force shaping market behaviour in early 2026. “Policy shapes markets — and markets shape agriculture,” she said. “Right now, uncertainty is the wet blanket holding everything back.”
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Let's talk markets because there's a lot happening, especially the markets tied to the biofuel space. Lots happening. And we're going to talk to Susan Stroud of Noble AG who I think is in an airport somewhere in the U.S. michigan. Correct. Susan.
I think they all start to run together. I know I'm in the States. Yes.
Yeah. Okay, good. Hey. Well, the Detroit airport's got some fabulous sushi because of all the Japanese automakers that come in and out of that, out of there. So great food in the Detroit airport. Let's I guess last night we heard the president speak in Iowa. He mentioned E15. If it attached to it though if it gets to his desk, he will sign it. He kind of did. He punt the football over to Senate majority leader soon and host Speaker Johnson. Like, should we feel more confident we're going to get E15 year round now?
I honestly, I really think that the probably the more important piece of it or looking at it from a producer perspective. So let me back up. I feel like, and you probably feel the same way that you've heard more about e15 over the course of the past month or so than maybe we have over the past few years combined. So it's gaining momentum. And to be clear about what we're talking about, it is allowing the year round nationwide sale of E15. You know, every, when we're, when we're Talking about ethanol, every percent matters. So using, using 2024 numbers, with our blend rate, our Nash, our, our annual blend rate has been a 10.4 or so. And when you look at a 1% increase in blend, that's adding additional corn ethanol demand. That's the equivalent of North Dakota's entire corn crop each year. So it's nearly half a billion bushels of demand. But the biggest piece of this and I think one thing that a lot of people tend to overlook is really the reality of the situation. This isn't something that just happens overnight. I mean, it feels like we're finally headed the right direction where we will see, we will see approval for nationwide sales year round. But the big piece of it is when you consider right now the US Ethanol plants, I mean we're already running at a fairly high capacity anyway. We've broken, I believe it's three or four weekly records for Corn ethanol production this marketing year alone. So that tells you, you know, the industry is already taking advantage of the capacity that it has and implementation of something like this. It doesn't just happen overnight. There are a lot of infrastructure challenges that have to be met. So while longer term, yeah, this is a great thing for us corn ethanol, we also need to keep it in perspective because it definitely E15 will not fix today's carryout problems. It's a long term play and I think a lot of people lose sight of that or I think there's just a lot of misconceptions in general, especially with the producer crowd because what are we talking about today? We're talking about we have a record 17 billion bushel corn crop this year and we have prices that the producer is not satisfied with. And so I think a lot of people look at this as a saving grace. And while it's important longer term, it's not something that fixes the balance sheet today.
Not a magic bullet. Any, any idea. Because sometimes increased demand doesn't bring higher prices, unfortunately. So if this does happen, does what, does it add to the corn price or does it.
I think it's very dangerous. Now if, if it was, if I was speaking on behalf of a, like a biofuel trade association or something like that, I'm sure they've done the math and you know, the way that it lifts corn prices, but overall that's impossible.
Be careful.
Absolutely impossible to say. Yeah, well, you just can't. It makes no sense to go out and put a specific number on it today. And I think you also have to consider, you know, we're, we're producing a near, we've had weeks here where we have record amounts of ethanol production. Well, a lot of that is going to exports. And so we've seen a resurgence in US Exports. Right now US Ethanol, US Gulf ethanol prices are at a record discount to Brazilian ethanol prices. And so that's one thing that's really, that's provided a tailwind for US Ethanol in general.
One of the other biofuel issues we're, we're waiting and we think we could get an update on this fairly soon is what's going on with 45Z. What are you watching for there?
Okay, so probably to, to back up here and, and help help everyone out. So we have two very, we have two different but yet equally important pieces of policy that we're talking about today. So at 45Z, the clean fuel production credit. So remember that this is the way that we're incentivizing domestic low carbon intensity biofuel production. It was a, you know, it replaced in 2025, it replaced the long standing $1 blending tax credit for biomass based diesels. 45z in 2025 was just nothing short of a disaster, kind of for not only in the biofuel production space, but then by as a victim of that too. We talk about canola oil demand into biomass based diesels and soybean oil demand because the original version penalised crop based BioFuels. Today, with 45Z for 2026 forward, the credit structure changed quite a bit. And that was because of the amendments that were part of the big beautiful bill that was signed into law in July by President Trump. And so we, with the new 45Z, it removed indirect land use change penalties and so that crop based biofuels on a more even playing field with waste feedstocks and it's effectively doubled and nearly, and in some cases like renewable diesel, nearly tripled the value of the tax credit that you can receive by using soybean oil in the production of those fuels. And it also, it gave a benefit to ethanol margins too, a nice boost because it does give on average an 11 cent per gallon credit for corn ethanol production. So that is the one piece of policy that's actually set in stone and we know for now that's in place through the end of 2029. What we're waiting on though at this point would be EPA to finalise the renewable volume obligations. So you've probably heard RVO mentioned a thousand times here lately. So we are waiting on EPA to finalise the volumes and the rules surrounding the renewable fuel standard mandate for 2026 and 27. So that's really what the market is waiting on today. It's still completely, you know, it's, it's completely up in the air. So EPA, initially, in their initial proposal back in mid June, they proposed substantially higher volumes of biomass based diesels to be blended in with petroleum supplies. So soybean oil reacted very positively. One big function or kind of the, the way that gets us to, to those substantially higher volumes is because they propose this 50% RIN haircut on any foreign derived biofuels. So they're proposing that either imported biofuels would only generate a half RIN or any US produced biofuels that are made from a foreign feedstock. So, so imported tallow, imported used cooking oil, they're saying that those fuels would also only generate a half rin. And so it gave a tremendous advantage to anything that would be made from a domestic feedstock like soybean oil.
Canadian canola facing that 50% RIN haircut.
Yeah. So Canadian canola is back in the mix with 45z because of the removal of indirect land use change. So that reduced the carbon intensity of any canola oil based fuels enough that it begins to qualify for tax credit. So that's a good thing. But yeah, it's still. And with 45Z, it put that North American fence on feedstocks. And so that means US Canadian and Mexican and feedstocks originating in Mexico are all considered domestic. So that is one thing. That's a big question now with the pending RVO that we're waiting on, probably the biggest question. It's not just okay, what are the volumes, but it's the mechanics behind it. Will the administration stick with this 50% D on anything that would be imported? Would they maybe adopt the same guidelines that North American feedstock rule that we see in 45Z? You know, so there are several things here that are still up in the air and we've had a lot of conflicting reports coming from, you know, it's, every day is a new biofuel policy rumour. But I think, personally I think the, and I don't have a crystal ball, but the administration has been very clear on this America first energy policy. We saw it in 45Z. It was mentioned explicitly there in those 45Z amendments. And then when EPA released their initial proposal. I'll, I'll read you just a couple lines from it because I think this is really important. So EPA said specifically they are concerned about the increasing amounts of foreign feedstocks like used cooking oil and animal fats from China, etc. They may be displacing US produced feedstocks like corn and soybean oil. And then this is where it really gets interesting. They specifically linked declining US Farm incomes with the influx of foreign fats, oils and greases. So you don't hear EPA say the word farmer many times. That never happens. In fact, in the history of the renewable fuel standard, it's only been mentioned a handful of times and it's always been tied directly to ethanol. This is the first time though that in EPA's proposal, initial proposal, American farmers are already struggling. This undercuts U.S. producers and so on and so forth, further harming U.S. farmers. So I think that that's probably one of the more important things to pay attention to out of this. I really feel like the administration has, has made it clear what their intentions are and, and at the end of the day, you know, the biggest issue with what's happened in the biomass based diesel space the past few years is the renewable fuel, the renewable diesel boom that is a direct result of California's low carbon fuel standard. You know, EPA really underestimated how quickly we would see renewable diesel production take off. And because of that we, you know, we have renewable diesel production that's push way up here and we have a mandate that's stuck botline down here and how EPA is proposing it. They are getting actual production and the mandate much closer in line. And that's why you see soybean oil have a positive reaction to this. And I guess we'll see, we'll know here in a few more weeks exactly how it all shakes out.
Yeah, it seemed like we were definitely on this path of this 50% RIN haircut and the president met with small, small refiners and then he kind of like, oh, like it sort of maybe we should push this back. Right. So there had, and there's been some reporting at a Reuters has been all over the place. Peter Navarro has been sending out cute little AI generated memes. Like you said, there's been a lot of mixed messaging here on what is actually what going to be the end, the final conclusion.
Yeah, I think so. And that's really what makes me, I mean, I guess I was kind of starting to get sucked into that camp of well, maybe this is too, too big of a thing. Maybe they're going to pivot, maybe they won't. Maybe they're going to get rid of the wren haircuts and I don't know, maybe, you know, maybe they do at the end of the day. But we have to look at what they've given us. And they exclusively mentioned the word farmer. Yeah, I don't remember if it was a dozen times or something. And that initial release on June 13th, you know, that's never happened before.
So they, I guess the question I have, Susan, though is that do they because we've seen this happen in other areas where trying to deal with China and then that scope creeps to all geographies. And so the question may come down to do they put a fence around North America or do they group, you know, Mexican production or Canadian production as if it is. It might as well be coming from China because it's all going to be treated the same. I think that's kind of a decision they'll have to make.
Yeah. And I mean at the end of the day the 50% rending, if we're talking about US only feedstocks that limit your feedstock pool in a really large way or it really changes the economics. And so it's not that you won't still see those foreign, if it comes to fruition as it's written today, it's not that you would see those foreign feed stocks, just our production from foreign feed sacks stop altogether. But it really changes the, the dynamics and the price structure. And I think that's a lot of why, you see soybean oil here lately has started to creep back higher with this idea that, okay, we're finally going to have an answer. I, I don't know. Either way, there will be, you know, anything with policy and when the government is making decisions and I mean, they're influence, you know, they're, they're influencing markets. And actually the. In Michigan this morning, I was speaking to a group and my presentation deck is called the change is the only Constant. But it is policy shapes markets and then markets shape agriculture. And it's really, it's a recurring theme. If this isn't anything new, it feels like it's really just been thrust into the spotlight that much more. And I think a lot of it is because the US Farmer is looking at the Trump administration and saying, well, they, you know, we're trying to get back on track with China or we're trying to diversify or change the dynamic a little bit because we're so reliant on export business to China. And Trump himself, he had a truth social post back the beginning of March of 2025. And I really think it was kind of like, you know, the writing on the wall in my mind, because it was right at that point we were really starting to see trade relations sour with not just China, but the entire world.
Yeah.
But he specifically said, you know, to the great farmers in the United States, get ready to start making a lot of agricultural product to be sold inside. And he put the word inside in all caps of the United States. You know, I, I look at that as saying, this is an America first energy policy that's taking shape. But that is just my opinion.
So, yeah, I remember, I think that was that. I think that was the week of commodity classic, if I remember correctly. Because everybody in the media was like, what does this mean? Yeah, buy bigger tractors. I think he said.
Wouldn'T be the first time we've heard that. Yeah, yeah. But either way, I don't know how things pan out here in a few weeks when we finally get, you know, we get some answers or Some. Some final decisions out of epa, but markets in general, on the soybean oil side of things, markets have been really positive here, as we kind of is. The administration is signalling at least we're going to have an answer at some point. You know, markets don't like, except extended periods of uncertainty because ultimately it's just a wet blanket on things. You have to open things up and let the market breathe and let the market do its job. And we have to actually, we have to know the policy before that can happen.
Yeah. And what about the overall. The soybean price itself? You talk about soybean oil the future a couple times. What about the, the soybean future?
I think the next thing for beans is we. We have that initial 12 million metric tonnes out of the way. China has not been an active buyer since they got to the point where that first 12 was done. We haven't really heard much of anything out of them the past week and a half or so, which I don't know that it really matters. US logistics are such a disaster right now as we're trying to dig out of snow and deal with low water and ice and everything else. I do think, though, that eventually the market, the market needs to know what's the timeline on this nexus? 25 million metric tonnes. Treasury Secretary, he said, he mentioned it last week, specifically in an interview with Fox after he met with his Chinese counterpart. And I think that the, you know, he said 25 specifically. Those are still numbers that China has never officially acknowledged, much less say there's an actual deal, but the market's going to start wondering, when does this happen? And at the end of the day, 25 million metric tonnes. I mean, that sounds great, but that just gets us back on track with a semi normal export programme to China.
We've been talking to Susan Stroud, Noble ag. Susan, thanks so much for joining us here today. Keep up the great work. Fantastic, fantastic analysis. And really appreciate you taking some time to join us as you are in transit to wherever your next destination is.
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