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🏛️ 45Z Clean Fuel Tax Credit — New Guidance
The US Treasury Department and IRS released long-awaited proposed guidance on the 45Z Clean Fuel Production tax credit this week. Biofuel and agricultural groups largely welcomed the rules, citing improved clarity after years of delays.
Key takeaways from the proposal:
Fuels produced after December 31, 2025, must use feedstocks grown exclusively in the US, Mexico, or Canada
The 45Z credit is extended through 2029
The special SAF credit rate is eliminated for fuel produced after January 1, 2026
The indirect land use change (ILUC) penalty is removed
A 60-day public comment period is now open, with a public hearing scheduled for May 28

🧾 45Z — Important Context & Clarifications
45Z was enacted under the Inflation Reduction Act of 2022, but implementation has been repeatedly delayed
It is a clean fuel production credit, claimed by biofuel producers (ethanol, biodiesel, renewable diesel, etc.)
This is not 45Q, which applies to carbon capture and sequestration
In most cases, plants can claim either 45Z or 45Q—not both
Non-SAF fuels can receive up to $1.00 per gallon
Only a limited number of plants claimed 45Z in 2025
Plants are now preparing for 2026 production, though rules remain proposed
There is no direct payment to farmers—plants will decide how low-CI premiums are shared
Treasury plans to release a Feedstock Carbon Intensity Calculator (FD-CIC) to address farming practices

🚜 US Farmer Sentiment Slides
Farmer sentiment dropped sharply in January. Purdue University’s CME Group Ag Economy Barometer showed:
A steep decline in current conditions and future expectations
Nearly 60% of farmers expect bad financial times over the next year
Long-term pessimism rose meaningfully
Concerns about US agricultural exports increased
This highlights the difficult backdrop facing producers even as policy clarity improves.

🇧🇷 Brazil Ethanol Production Outlook
Brazilian ethanol production is expected to rise this year as-
Ethanol prices improve
Sugar prices weaken
New corn ethanol plants come online
A large sugarcane crop boosts output
StoneX projects strong growth, with corn ethanol production jumping sharply. This could push Brazil toward higher ethanol exports, and corn usage for ethanol may reach a record share of production.

🇨🇳 China’s “No. 1 Document” & Food Security
China unveiled its annual rural policy blueprint aimed at boosting food self-sufficiency. The plan emphasizes:
Higher grain and oilseed production
Diversified agricultural imports
Reduced reliance on traditional suppliers like the US and Canada
Expanded sourcing from South America and the Global South
New quotas on beef imports and tariffs on EU dairy
Increased investment in agricultural innovation

₿ Bitcoin Update
Bitcoin has fallen to its lowest level since November 2024, pressured by:
Liquidations of leveraged positions
Weak sentiment in crypto derivatives
Broader financial market volatility
Despite some institutional interest, everyday investor participation has slowed, leaving Bitcoin under continued pressure.

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🇺🇸🇮🇳 US–India Trade Deal
The Trump administration announced a trade agreement with India that reduces tariffs on Indian imports into the US from 25% to 18%. In exchange, India agreed to remove tariffs and trade restrictions on US goods and halt purchases of Russian oil.
India also committed to purchasing more than $500 billion of American goods, including agricultural products. However, key details remain unclear, including when the deal takes effect and which specific products India will buy.

🌽 Grain Markets
Grain futures extended losses on Monday. The March 2026 corn contract fell roughly 3 cents to near $4.26 per bushel, while March 2026 soybeans slipped about 4 cents to around $10.60 per bushel.
Wheat futures also ended lower, pressured by concerns about frigid temperatures across the US Plains and the Black Sea region.

🚢 Export Inspections
US corn inspections declined last week but remain strong overall. The USDA reported inspections of 1.1 million metric tons for the week ending January 29, down 27% from the prior week and nearly 10% below the same week last year.
Soybean inspections came in near the high end of expectations at 1.3 million metric tons. That figure was slightly lower week-over-week but well above last year’s pace, with China accounting for roughly 56% of total shipments.
Wheat inspections totaled 326,828 metric tons, near the top of expectations. Shipments were lower versus the previous week but significantly higher than the same week last year.

🥩 Tyson Foods
Tyson Foods reported another difficult quarter for its beef segment, posting an adjusted operating loss of $143 million. Tight cattle supplies continue to push costs higher, and Tyson expects those conditions to persist through this year and into 2027.
In contrast, Tyson’s chicken segment posted year-over-year sales growth, marking a fifth straight quarter of volume gains. The company expects chicken to be the preferred protein this year due to affordability.

🇧🇷 Brazil Soybeans
Brazil’s soybean harvest continues to advance steadily. AgRural estimates that 10% of the crop had been harvested as of last Thursday, slightly ahead of last year’s pace.
StoneX raised its Brazilian soybean production estimate to a record 181.6 million metric tons, while Celeres lifted its forecast to 181.3 million.

🚜 Farm Aid Talks
Lawmakers continue to push for additional farmer assistance. Michigan Representative Kristen McDonald Rivet said more aid is needed to help farmers cope with high input costs and tariff-related disruptions.
She emphasized that federal aid is a temporary fix and that farmers ultimately need more reliable markets and predictable trade policy. McDonald is a co-sponsor of the proposed Farm and Family Relief Act of 2026, which calls for nearly $30 billion in aid. She believes Congress will approve the recently discussed $15 billion package by the end of the month.

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🌽🌱 Grain Futures Recap

Grain futures finished lower on Friday, pressured by profit-taking and a rebound in the US dollar.

March corn slipped by nearly 3 cents to $4.28

March soybeans dropped 8 cents to $10.64

Wheat futures also declined, with Chicago March wheat down about 4 cents to $5.38

Markets also continue to price in strong Brazilian crop expectations, while traders assessed the impact of severe cold across the US Plains earlier this week and frigid temperatures in Ukraine.
👉 See grain charts below

🥇🥈 Gold & Silver: Historic Volatility

Precious metals suffered historic one-day losses on Friday.

Gold futures fell sharply

Silver posted its worst daily decline since 1980

The selloff followed President Trump’s nomination of Kevin Warsh as the next Fed Chair, which eased concerns about central bank independence and sent the US dollar sharply higher.

Longer term, metals may still find support from geopolitical risks and trade uncertainty, but Friday was a major reset.
👉 See gold, silver, and Dollar Index charts below

🏛️ Federal Reserve Update

President Trump officially selected Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair when Powell’s term ends in May.

Warsh has historically been a policy hawk

Recently shifted toward supporting lower rates

Viewed by markets as more inflation-focused than other rumored picks

One analyst summed it up:

“Because Warsh has been a policy hawk his entire life, his newfound dovishness looks very suspect.”

👉 See Dollar Index and Bloomberg Commodity Index charts below

📊 CFTC Commitment of Traders

The Commodity Futures Trading Commission released its weekly COT report.

For the week ending January 27, funds were net buyers across major ag markets:

Corn

Soybeans

SRW wheat

👉 See Fund Tracker charts below

🚜 Farmer Assistance Update

Additional farmer aid remains under discussion in Washington.

According to John Boozman, the proposed $15B package was excluded from the current spending bill

Aid could still move forward as a standalone bill or disaster relief add-on

The $11B Farmer Bridge Assistance program is still scheduled to be distributed by February 28

🐄 Cattle Inventory: Historically Tight

The USDA cattle inventory report confirmed the smallest US herd since 1951.

Total herd: 86.2 million head

Beef cow numbers declined again

Slight uptick in replacement heifers, but not enough to signal real expansion

Bottom line: structurally bullish for the cattle market with no clear signs of herd rebuilding.

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🥈 Precious Metals Volatility

Silver futures were slammed this morning, with the nearby March contract down sharply in early trade. Gold also moved lower. Some traders are pointing to speculation around an imminent Trump pick for the next Fed Chair as a possible catalyst. Regardless of the reason, the size and speed of the move has grabbed everyone’s attention.

🎰 Prediction Markets & CME’s Next Move

The CFTC says it plans to update prediction-market rules, aiming to provide more regulatory clarity while supporting “lawful innovation.” Chairman Michael Selig confirmed the agency will withdraw a prior proposal that would have banned sports- and political-related contracts.

Platforms like Polymarket and Kalshi continue to grow rapidly, and CME is now partnering with FanDuel in the prediction-market space. With CME already planning 24/7 crypto derivatives trading, some believe this is a stepping stone toward round-the-clock trading in traditional commodity markets—an effort to avoid losing market share to online betting platforms. 🎲

❄️ Ukraine Cold Threat & Wheat Support

Extremely cold temperatures are forecast across much of Ukraine early next week, with readings potentially plunging well below zero. A large share of the country’s winter wheat crop currently lacks protective snow cover, raising winterkill concerns. These risks helped support wheat futures as traders also assessed lingering impacts from last week’s U.S. winter storm.

🌱 Soybeans Ease on Brazil Supply

Soybean futures softened as Brazil’s harvest ramps up and expectations build for a record-large crop. After completing initial U.S. purchases, China is expected to shift more demand toward Brazilian supplies. A weak U.S. dollar, however, continues to provide underlying support by improving export competitiveness.

🚢 Weekly Export Sales

U.S. corn export sales slowed from last week’s near-record pace, while soybean sales also declined. Wheat sales came in near the upper end of expectations. Japan was the top buyer for corn and wheat, while China led soybean purchases.

🛢️ Oil Rallies on Middle East Risk

Crude oil prices surged amid rising U.S.–Iran tensions. Markets are reacting to fears of supply disruptions, particularly the risk of instability in the Strait of Hormuz, a key global oil chokepoint.

🌧️ US Drought Update

USDA’s latest drought monitor showed limited improvement across much of the Corn Belt due to frozen ground conditions, though some areas did see relief. Drought conditions worsened in parts of the High Plains.

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Welcome back!
Grain futures finished higher Wednesday as a weaker US dollar, biofuel headlines, and weather concerns provided support across ag and macro markets. Here’s what moved markets today 👇

🌽 Grain Markets
Corn and soybeans ended the session modestly higher, supported by a sharply weaker US dollar, which improves US export competitiveness.
President Trump said Congress is close to approving year-round E15, and that new biofuel guidelines are nearing completion—adding support to corn demand expectations.
Wheat also closed higher as traders continue to assess potential crop impacts from the recent winter storm.
In my view, developing dryness and a hot/dry forecast in Argentina likely played a role in row crop strength as well. See the map from our friends at CropProphet below.

🌾 Ethanol Update
US ethanol production declined modestly last week, though output remains higher than the same week last year.
Ethanol stocks also fell week over week and year over year.
According to Reuters data, ethanol margins weakened across the Corn Belt and are currently negative to breakeven, reflecting softer profitability.
Margins improved slightly following Monday’s corn selloff.

🐄 Livestock & Animal Health
The NCBA warned that it is likely only a matter of time before New World screwworm reaches the US.
NCBA President Buck Wehrbein said the pest is more likely to enter via wildlife than cattle imports and emphasized that the US successfully eradicated screwworm in the 1960s.
Recent rumors of screwworm already reaching the US triggered sharp selling in live and feeder cattle futures last week.

🥇 Precious Metals & Margins
CME Group raised margin requirements on precious metal futures following the historic rally in gold and silver.
Higher margins mean traders will need more capital to hold positions, potentially limiting participation by smaller traders.
Silver and gold both hit record highs before settling lower on the day.
For perspective: silver at ~$117/oz is roughly equivalent to trading $117 corn or soybeans, with a contract value near $585,000.

🏦 Federal Reserve
The Fed held interest rates steady, with two governors dissenting in favor of a cut.
Inflation remains above target, while labor markets show signs of stabilization.
Jerome Powell’s term ends in May, after which President Trump will appoint a new Fed chair.
Futures markets are pricing in limited rate cuts this year and none in 2027.

👉 Like, subscribe, and drop a comment with what you’re watching in grains, livestock, or macro.
Staying informed matters—especially in markets like these.

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Welcome back to the channel!
In today’s update, we cover Trump’s comments on year-round E15, growing weakness in the U.S. dollar, 2026 acreage debates, heat stress in Argentina, fresh USDA flash sales, and China’s latest soybean buying behavior.

⛽🇺🇸 E15, Trump & The Fed
President Trump visited Iowa and said Congress is very close to approving year-round E15 sales
Comments come after the White House failed to include E15 language in the current funding bill.
Trump declared the U.S. is entering a “golden age.”
He said a new Fed Chair announcement is coming soon and predicted significantly lower interest rates.

💵📉 U.S. Dollar Breakdown
The dollar hit its weakest level in nearly four years.
Pressure is coming from policy uncertainty, fiscal risks, and political polarization.
Euro, yen, and Swiss franc are at multi-year highs.
Emerging-market currencies are trading at record levels.
Investors are paying record premiums to hedge against further dollar weakness.

🌽🌱 2026 Acreage Debate
S&P Global estimates corn acreage at 95 million and soybeans at 84.5 million.
Higher corn input costs and crop rotation favor soybean.
China’s renewed soybean purchases add support to bean acres.
NCGA projects an $180/acre loss for corn.
Pro Farmer notes fertilizer already applied and historical trends could keep corn acres elevated.
Crop insurance guarantees in February will be key.

🔥🇦🇷 Argentina Weather Stress
Temps nearing 104°F across major growing regions.
Limited rain until February raises yield risks.
USDA estimates: 53 mmt corn, 48.5 mmt soybeans.
Planting nearly complete, but pasture conditions are deteriorating.
Meal markets remain quiet; bean oil strong amid biofuel sentiment.

🚢📊 USDA Flash Sales
110,000 mt of corn sold to unknown destinations (2025/26)
306,000 mt of sorghum sold to unknown destinations (2025/26)
First U.S. sorghum flash sale since August 2024.

🇨🇳🌎 China Soybean Buying
China booked at least 25 cargoes of Brazilian soybeans for Mar–Apr shipment.
Brazil holds a strong price advantage over U.S. beans.
China has now fulfilled its ~12 mmt U.S. purchase commitment.
Recent U.S. buying appears obligation-driven, not structural.
With large South American crops expected, China likely avoids U.S. beans until new crop this fall.

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🧪 Fertilizer Market & USDA Action
The USDA is taking a closer look at potential collusion in the fertilizer industry. Last week, Deputy Agriculture Secretary Stephen Vaden accused fertilizer giants Nutrien and Mosaic of working to limit supply and keep prices elevated. The two companies accounted for more than 90% of North American phosphate fertilizer and potash production last year.
A proposed new potash mine in Saskatchewan could weaken their market control and add supply to the U.S. market as early as next year. USDA officials say they are closely monitoring fertilizer markets and could take action to boost competition if needed.
Vaden also took aim at farm equipment manufacturers, backing the administration’s push for right-to-repair protections for farmers.

🌽 Biofuels Policy & 45Z Tax Credit
Clean Fuels Alliance America is urging the Trump administration to release the proposed 45Z tax credit rules. The request comes after the White House completed its review of the rule.
According to the biofuels group, clearer guidance is needed to reduce uncertainty and support biodiesel, renewable diesel, and sustainable aviation fuel production. They warned that continued delays could jeopardize investments, production, and rural jobs, while final rules could boost commodity demand and rural economic activity.
President Trump is scheduled to speak today in Clive, Iowa, where energy and economic issues are expected to be front and center. While there’s some chatter about a possible biofuel announcement, nothing is confirmed.

🌾 Wheat, Corn & Soybean Markets
Wheat futures moved lower on Monday. The CBOT March contract fell to around $5.23 after earlier touching the highest level since mid-December.
Cold weather in the High Plains raised concerns over crop damage, but snowfall helped insulate much of the wheat belt. Some damage was reported in parts of Nebraska, northeastern Colorado, and northwestern Kansas.

🚢 Export Inspections
U.S. corn shipments were strong last week. USDA reported 1.5 million metric tons of corn inspected for export, higher than both the previous week and last year.
Soybean inspections totaled 1.3 million metric tons, slightly lower week-to-week but sharply higher year-over-year, with China accounting for the majority of shipments.
Wheat inspections were weaker, trailing both last week and last year.

🇧🇷 Brazil Crop Update
AgRural raised its forecast for Brazil’s soybean crop again, now calling for a record harvest. Corn production estimates were also nudged higher.
Soybean harvest and second-crop corn planting are both running ahead of last year’s pace, while first-crop corn harvest is slightly behind. Rainfall has been mostly average, though southern areas remain somewhat dry.
Based on current estimates, Brazil’s soybean crop would be substantially larger than the U.S. crop.

🔥 Natural Gas & Winter Storm Impact
Natural gas prices surged to their highest level in years as Winter Storm Fern swept across the U.S., driving up heating demand.
The storm knocked out power to hundreds of thousands of customers and disrupted roughly 10% of U.S. natural gas production. In response, the Department of Energy issued emergency orders aimed at stabilizing power grids and reducing blackout risks in New England and Texas.

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🏛️ Government Shutdown Risk
The risk of a partial government shutdown is rising as the Senate prepares to vote later this week on a House-passed $1.2 trillion funding package. Following another fatal shooting involving federal immigration agents in Minnesota, Democratic lawmakers are threatening to oppose the bill due to DHS and ICE funding concerns. Democrats argue the package lacks reforms to rein in ICE.

While funding for many other agencies is included, there may still be enough Democratic support to avoid a shutdown. The last shutdown lasted 43 days and delayed key USDA and CFTC reports. Polymarket odds of a shutdown jumped sharply over the weekend. There is growing concern that previously approved FBA payments, currently slated for late February, could be delayed if a shutdown occurs.

❄️ Winter Storm & Cold Impacts
This weekend’s winter storm delivered widespread snow and extreme cold across the Plains. Parts of HRW wheat country in the Southern Plains received beneficial snowfall, reducing winterkill risk. However, below-zero temperatures combined with snow created severe cold stress for livestock, limiting weight gains and increasing risks for producers in calving season.

Wind chills in the Northern Plains plunged to extreme levels, while portions of Texas and Oklahoma face record lows with freezing temperatures expected to persist. Single-digit temperatures may linger another day or two in HRW wheat areas, while SRW wheat country in the Midwest remains locked in frigid conditions this week.

🌽 Grain Markets
Corn futures advanced on Friday, led by strong export demand. The most active March contract settled higher, supported by near-record export sales and competitive U.S. prices on the global market. Growing concern over dry conditions in parts of South America has added uncertainty around crop potential. Soybean and wheat futures also posted gains.

⛽ E15 Left Out (Again)
Farm groups and ethanol advocates are pushing back after Congress once again omitted year-round E15 sales from the funding package. Instead, lawmakers plan to form an E15 Rural Domestic Energy Council to study the issue.

🚢 Export Sales
U.S. export sales were impressive last week:
Corn sales set a marketing-year high, far exceeding expectations, with unknown destinations as the top buyer.
Soybean sales also hit a marketing-year high, with China leading purchases.
Wheat sales surpassed expectations, with unknown destinations again the largest buyer.
Overall, export demand remains a major source of support for the grain markets.

📊 CFTC Fund Positioning

In the latest Commitment of Traders report, large money managers were net sellers across corn, soybeans, and SRW wheat. The net short position in corn is now the largest since late October, reflecting continued bearish positioning despite recent market strength.

🐄 Cattle on Feed

Friday’s Cattle on Feed report came in largely neutral. Cattle on feed were below last year but slightly above expectations. Placements and marketings were both near or above pre-report estimates.
Notably, heifers made up a large share of cattle on feed, signaling that many are still being fed rather than retained for herd rebuilding—an important long-term signal for the cattle market.