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FAPRI: E15 expansion could boost corn, cut soybean prices

A new report from the University of Missouri’s Food and Ag Policy Research Institute says there could be a market tradeoff if E15 becomes more widely used.

An increase in U.S. ethanol consumption would increase corn demand and markets, but FAPRI says it could also reduce demand for biodiesel and put downward pressure on the soybean markets.

If E15 use expands, FAPRI says soybean prices are projected to fall 9 to 22 cents per bushel through 2030, while corn prices would increase from 2 cents to 7 cents per bushel.

More E15 use would also modestly reduce farm program spending, because higher corn prices, mean less need for support, and while soybean related support might be higher, it’s smaller than the corn effect.

The report also says expanded E15 would ease refiners’ costs of meeting Renewable Fuel Standard mandates (as long as RFS requirements don’t increase) because more ethanol is blended naturally into the fuel supply. This reduces demand and prices for Renewable Identification Numbers (RINs).

A special council of lawmakers in the U.S. House has been trying to work toward legislation that would allow for nationwide, year-round E15, but has missed two key deadlines. Read FAPRI’s report.