Biofuels complex split in July, biodiesel and renewable diesel prices surged as much as 25% week-over-week on tightening feedstocks, while RINs and RVO reversed sharply into month-end, down roughly 10% open to close. Ethanol held its ground on E15-driven blending demand even as corn costs rose 7.2%, squeezing crush margins from the feedstock side. With a Senate markup on permanent year-round E15 and fresh small-refinery-exemption fallout both landing within days of each other, the next few weeks will test whether the physical product rally or the credit-side weakness wins out.
BLENDED FEEDSTOCK INDEX (W1=100)
PRICE ACTION
- In July, the US saw ethanol production rise by 3% with prices at the Kinder Morgan Argo terminal rising by 1.5% (W1 to W5 weekly average).
- RVO fell an average 3.4% MoM; within July itself, RVO, D4, and D6 fell in lockstep by roughly 10% open to close, driven by the end of month sell-off.
- Midwest FOB saw the largest percentage gains through the month while East Coast FOB stayed steadiest, moving least on a percentage basis.
CROSS-MARKET DYNAMICS
- With corn conditions slipping to 61% good-to-excellent and corn costs up 7.2% in July, ethanol held nearly flat at 1.8684 USD/gal to 1.8650 USD/gal as the EPA's Middle East linked E15 summer waiver has kept blending demand elevated, end of month ethanol production hitting a 28-week high of 1.3 MMBPD.
SOMETHING TO WATCH
- Senate Ag Committee's Aug 6 markup (day before recess) is expected to include year-round E15, blending the House bill (H.R. 1346) with the Senate's Fischer-Capito bill (S. 593). If it passes, ethanol won't need annual EPA waivers anymore, the demand supports being seen now becomes permanent instead of waiver dependent.
- On Aug 3, 2026, EPA granted one full and two 50% SREs for the 2024 compliance year, removing 160 million RINs from obligations with no corresponding reallocation on top of the 70% baseline already set in March's Set 2 rule; watch for any follow-up reallocation action and the D4/D6 spread response in the following weeks.
Note: All figures, prices and market activity referenced in this report are based on the period covered by this monthly update.
