The Wednesday HOT TAKE

In today’s HOT TAKE: the number USDA has been chasing higher for nearly two years, Brazil’s 50th new monthly corn-ethanol record since 2017, the disaster that wasn’t, and why a few of you in Indiana may need a snorkel.

Plus, Pro Farmer, August weather, higher prices and a market that — believe it or not — is starting to feel a little more normal again.

On Sunday, we highlighted the rapid growth in global industrial soybean oil use as biofuel policy reshapes demand.

Global industrial use is projected to reach a record 41.7 billion pounds (18.9 MMT) in 2026/27, up 10% YoY, led by record demand in both the U.S. and Brazil.

Brazil edged out the U.S. in 2023/24 and has remained the world’s largest industrial consumer of soybean oil for three years. At home, policy became a major headwind in 2025 as the $1/gal 40A blenders tax credit was replaced by 45Z, cutting soybean oil’s credit value to a fraction of what it had been. The incentive fell, and soybean oil demand fell right along with it.

That changes in 2026/27. The revised 45Z that took effect in 2026, combined with EPA’s record-large RVOs for 2026 and 2027, is projected to drive U.S. soybean oil use for biofuels to a record 17.8 billion pounds (8.1 MMT) — up 21% YoY and 11% above Brazil (7.3 MMT).

Together, the U.S. and Brazil account for more than 80% of global industrial soybean oil demand.

The result is an increasingly isolated U.S. soybean oil market.

Year-to-date, U.S. Gulf FOB prices are up more than 40%, versus 15% for Brazilian soybean oil and other major global benchmarks, leaving U.S. values 30% higher than alternative oils in Brazil, Argentina and Southeast Asia.