“Spooked The Market” – Corn, Soy, Soyoil Slump Amid Biofuel Law 

President Joe Biden’s administration is mulling over new measures to provide relief to U.S. oil refiners pressured from biofuel blending mandates. This has sent corn and soybean futures and soyoil futures lower on Friday. There were also new weather models forecasting crop-boosting rains in parts of the U.S. Midwest and Northern Plains, resulting in declines in grain prices. 

“The biofuel news spooked the market, you’ve got some rains in the Dakotas … and the palm oil was down 4% to 5% overnight. That is all weighing on it,” Craig Turner, senior ag broker at Daniels Trading, told Reuters. 

Reuters reported earlier this morning that Biden’s administration is under pressure with multiple labor unions and U.S. senators to assist oil refiners from biofuel blending mandates, which sparked the down move in corn and soybean and soyoil futures. 

During former President Donald Trump’s first term, his administration spent enormous effort to waive refiners from the Renewable Fuel Standard. Now the Biden administration has been rolling back Trump-era policy, this has sparked concerns “the policy threatens to bankrupt fuel makers already slammed by sinking demand during the pandemic,” said Reuters. 

The rule requires refiners to blend billions of gallons of ethanol and other biofuels into their fuels each year or buy credits from those that do, but under the Trump era, refiners invested very little into biofuel blending facilities. 

The credits, known as renewable identification numbers (RINs), can be received by a refiner once the renewable fuel is blended into gasoline or diesel. They can be traded and are currently at their highest price in the program’s 13-year history. 

Renewable fuel advocates blame refiners for their troubles for not investing in blending facilities years ago. 

Senators Chris Coons and Tom Carper of Delaware have spoken with EPA Administrator Michael Regan over providing relief for refiners. 

Traders are also waiting for important corn and soy acreage report expected to be released at the end of this month.