DeLong Commentary

CBOT:

Corn closed lower on Friday, as the market largely shrugged off higher energy prices and instead looked ahead to next week’s USDA March Stocks and Planting Intentions reports. The EPA’s RVO ruling, released today at the White House, came in line with prior expectations and provided little fresh price incentive. The May26 contract closed 5.25 cents lower at $4.62. The Jul26 contract lost 4.75 cents to close at $4.735, while the Sep26 ended the day down 4.50 cents at $4.765. Dec26 futures shed 4.50 cents to settle at $4.9025.

Soybeans closed 6-14 cents lower as profit-taking followed the EPA’s RVO release. The ruling’s figures had been widely discussed ahead of the announcement, and the trade had largely priced them in ahead of today’s session. May26 futures led the decline, closing 14.25 cents lower at $11.5925.  The Jul26 contract lost 14.00 cents to settle at $11.7525, while Nov26 futures ended the day down 8.50 cents at $11.44.

Market Headlines:

EPA announced 2026-2027 Renewable Fuel Standard (RFS) Renewable Volume Obligations (RVO) ruling:

The EPA announced the ruling at the White House Great American Agriculture Celebration, setting the highest renewable fuel blending requirements in the program’s 20-year history. To meet the new volume levels, biodiesel and renewable diesel production must increase more than 60% compared to 2025, creating a significant new demand floor for soybean oil. The ethanol mandate, meanwhile, holds steady at 15 billion gallons. Together, the EPA estimates the rule will generate over $10 billion for rural economies and create more than 100,000 new jobs across the agriculture and manufacturing sectors.

On the import side, the EPA will grant 100% RIN generation to imported biofuels and foreign-feedstock-produced biofuels for the 2026 and 2027 compliance years. That figure drops to 50% in 2028, giving domestic producers time to scale up while supporting US farmers and reinforcing American energy independence.

Finally, the EPA finalized a 70% partial reallocation of the 2023-2025 exempted Renewable Volume Obligations for the 2026 and 2027 compliance years.

Weekly Drought Data: 

A heat dome across the West and Plains is drove temperatures 20-25 degrees above normal, while below-normal precipitation expanded drought conditions across portions of the West, Great Plains, and Southeast. High winds combined with the heat and dryness have fueled active wildfires across the affected regions. The most significant fire currently burning is the Morrill Fire in Nebraska, which has scorched 642,029 acres.

In contrast, the Pacific Northwest, Upper Midwest, and Hawaiian Islands experienced well-above-normal precipitation. The Pacific Northwest received heavy rain and significant snowfall, while a strong winter storm delivered over 50 inches of snow across parts of the Upper Midwest. The Hawaiian Islands recorded historic rainfall totals, triggering extreme flooding and landslides. Although some drought conditions have eased with the added moisture, localized flooding has emerged as a new concern across several of these areas.

Turning to the Midwest specifically, conditions were highly variable. Unseasonably warm weather developed across western Illinois and southern Missouri, while Wisconsin, Minnesota, and Michigan were seeing below-normal temperatures. Precipitation patterns were equally mixed, with some areas recording 150-300% of normal weekly rainfall totals.

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