1 | King Corn

Only a few days remain until March 31’s Prospective Plantings report which will set the tone for new crop trade the next several months.

New crop acreage intentions are highly correlated with February averages not only because price action can drive planting decisions, but crop insurance guarantees are an important part of risk management on the farm.

Heading into Monday’s report, analysts are expecting 94.4 million acres of corn and 83.8 million acres of beans for a combined acreage pool just over 178 million.

Interesting to compare corn’s 53% of the C+B acreage pool (based on estimates) vs the Feb average ratio at 2.24:

2 | 2.3

The race for new crop acres is underway and while corn still holds the lead, soybeans have narrowed the gap this week amid pre-report position squaring and recent [positive] biofuel headlines:

3 | Big Moves

Soybean oil has seen its largest gains since January (the day 45Z guidance was released) after reports big oil and agriculture are teaming up to seek higher biomass-based diesel blending requirements in Renewable Fuel Standard volume mandates for 2026 and beyond.

Why is bean oil so sensitive to biofuel policy headlines?
50% of demand = biofuels. Futures remain 40% higher than their pre-renewable diesel era levels, largely driven by this NEW demand. Plus the way D4 RINs are nested in the RFS, it leaves bean oil extra sensitive to perceived policy changes.

Headline ups and downs:
<< Since 2020, there have been 16 days bean oil lost >5% - one particular news outlet put out a headline NEGATIVE to biofuel policy half of those days

<< Since 2020, there have been 8 days bean oil rallied >5% - that same news outlet printed a POSITIVE biofuel policy headline 6 of those days. The other 2 were days immediately following Russia's invasion of Ukraine

4 | D4 Disaster

2025 biofuel data is beginning to trickle in… and it is confirming our fears: a massive drop in biomass-based diesel production with the expiration of 40A's long-standing $1.00 per gallon biomass-based diesel blending credit at the end of 2024.

The U.S. generated just over 230 million gallon-equivalents in D4 RINs in February, down 50% year-on-year and a three-year low. The catastrophic decline comes as 45Z's policy offers a fraction of 40A's $1.00 subsidy, the loss of credits on imported biofuels, and lingering uncertainties amid a lack of a final rule and a new EPA with forward mandates still in question.

5 | Breaking down a bushel

Crazy to look at the additional value soybean oil has contributed to soybean futures since the renewable diesel boom began in 2021. 

Today, bean oil contributes an extra $1.25 per bushel to bean futures above its long term average value,  illustrating why biofuels and their policies are vitally important to the soybean market.

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