By Blake Jackson
The relationship between agriculture commodities and liquid fuel markets is complex and has changed over time. Corn and soybeans are the two main agricultural commodities used to produce biofuels, and the demand for biofuels has a significant impact on the prices of these commodities.
In recent years, there has been a growing demand for soybean oil, which has led to increased investment in soybean crush facilities. However, the demand for renewable diesel, another biofuel made from soybeans, has decreased due to lower expectations for EPA's blending targets.
The EPA sets Renewable Volume Obligations (RVOs), which are minimum volumes of renewable fuels that must be blended into the US fuel pool. The EPA's proposed RVOs for 2023, 2024, and 2025 were lower than the biofuels industry had hoped, and this has led to uncertainty about the future of biofuel production.
For corn and soybean producers, the outlook for corn used for ethanol is flat, and the outlook for soybeans crushed for fuel may have been curtailed. The overall impact of the renewable fuels market on agricultural markets is difficult to predict, but it is clear that this is a complex and dynamic relationship.
Photo Credit: gettyimages-bunyarit
Categories: Missouri, Crops, Corn, Soybeans, Energy