The New World Grain Order: Brazil’s record soybean flows and Europe’s tightening biodiesel spreads reveal a shifting balance where U.S. supply chains are left scrambling under political paralysis and

Gold broke through the $4,000 mark today, a symbol of how far risk sentiment has flipped as Washington’s shutdown drags on. With agencies idled and data frozen, the biofuels sector is flying blind. Producers are trimming output, D4 RINs are holding firm on thin liquidity, and the administration’s scaled-down $10 billion farm-aid proposal looks more cosmetic than corrective. The policy vacuum now extends from the EPA to the export docks.

Adding insult to injury, Brazil is eating America’s lunch. Brazil September soybean exports hit a record 7.34 million tons, up 20 percent from a year ago, bringing year-to-date shipments to nearly 94 million tons (+5 percent y/y). Brazil’s combination of currency advantage, smooth ports, and unbroken river access is pulling global demand its way just as U.S. exporters struggle with low water and policy paralysis. Farm-state frustration is swelling, and Washington’s messaging on rural support is wearing thin.

The Mississippi River continues to choke off movement. Barge drafts around Memphis are again restricted, forcing lighter loads for the fourth straight harvest season and pushing freight up another 30 percent. Soybean and corn flows have collapsed as elevators run out of space, and with no rain in sight, logistics pain will carry through late October.

In Europe, biodiesel trading was brisk. UCOME/RME widened to +66 as RME moved at $1,415 and FAME 0 hovered near $1,339. BOGO climbed to +468 / mt on firm window buying. HVO Class II from UCO slipped to $2,611 while SAF stayed above $2,700, narrowing the premium. Rapeseed oil remains about €10 / mt above soyoil, but the RSO curve flipped into backwardation, hinting at tight nearby supply even as soy structure flattened.

The tightening in rapeseed oil is being aggravated by renewed navigation constraints on the Rhine River. The Kaub bottleneck is again restricting movement of rapeseed to crushers, with water levels expected to drop from 0.88 meters today to around 0.80 by Thursday evening. Most barges are operating at 50–70 percent capacity, and freight surcharges are mounting to offset the extra vessel demand and delays. Without meaningful rainfall in the Rhine catchment over the coming week, these bottlenecks will likely persist through mid-October, tightening nearby RSO availability and supporting premiums into the crush margin.

Palm oil futures in Kuala Lumpur recovered to 4,472 ringgit ($1,062/mt) on expectations of weaker September output and firmer soyoil. The MPOB data due Friday should confirm the first stock draw in seven months. In Brazil, the government admitted it will miss its B16 biodiesel target next year in March, delaying growth in soyoil blending and leaving crushers more dependent on exports. Despite the policy drag in fuels, global vegetable oil demand remains resilient—USDA projects a 6.8 million-ton increase in 2025-26, driven mainly by food and industrial use.

Diesel cracks in Asia slipped below $20/bbl, but cash differentials rose as traders covered short positions. The Kirishi refinery outage in Russia added some support, and OPEC+'s modest output hike helped steady crude.

For now, the market is holding a defensive stance. Brazil’s surge, America’s waterways, and Europe’s river constraints are redrawing the trade map in real time—a reminder that logistics, not policy statements, still set the global grain/oilseeds order and this is why we are now seeing a tightening of carry in Soyoil Dec/Jul26 despite ample supplies.