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Oil futures slumped Tuesday as traders weighed prospects for a breakthrough in talks to end Russia’s invasion of Ukraine. The potential for more Russian barrels to add to an already glutted global market added to crude’s decline.
An accord that removes a threat to shipping around the Black Sea is also seen as a negative for a wheat market that’s already dealing with ample supply, boosted by big crops across the southern hemisphere and favorable weather elsewhere. Weakness in crude is also an anchor on corn and soybean prices because cheaper gasoline and diesel undercuts demand for biofuels.
West Texas Intermediate crude for February delivery, the U.S. benchmark, ended at $55.27, down 2.7%, while global benchmark February Brent crude closed at $58.92 a barrel – the lowest settlement for both since early February 2011.
EPA tells court no biofuel blending details until early 2026
Meanwhile, the soy complex saw no favors from news reports that the Environmental Protection Agency, in a court filing at the end of last week, said it likely won’t finalize 2026 and 2027 biofuel blending mandates until the first quarter of next year.
Reuters last week had reported that a delay was likely. The plan had been slated for this past October. Reuters notes that companies have complained the delay will force them to hold off on deals and delay spending decisions that determine output and margins.
Massive EU-South America trade deal faces last-minute threat
Objections from France are endangering a push by European Union officials to push a massive trade agreement with South America over the finish line this week.
European farmers have marched on Brussels, fearing intensified competition. The deal between the EU and the five Mercosur countries — Brazil, Argentina, Uruguay, Paraguay and Bolivia — would progressively remove duties on almost all goods traded between the two blocs over the next 15 years, according to the Associated Press. If ratified by both blocs, it would cover a market of 780 million people and a quarter of the world’s gross domestic product. Negotiators reached an agreement a year ago, but it must be approved by all 27 EU countries and the EU Parliament.
The AP reported that French Prime Minister Sebastien Lecornu on Sunday said the current deal was “unacceptable” and that conditions for a vote by EU heads of state and government set for Thursday hadn’t been met. He requested a delay, which could postpone the vote until next year or beyond, the report said.