Newsletter · 2026-10-04 · Ashutosh Agarwal

Diesel Export Ban Shelved as Lynas Buys in Brazil and Corn Stocks Shock Grains - Materials Weekly - Week of October 4, 2026

Materials Weekly on metals, critical minerals and farm inputs for the week of October 4, 2026, covering podcasts published September 27 to October 4. Synthesis of the shelved US diesel export ban and the G7 stock release, the bull-bear fight over record copper prices, Lynas buying Meteoric's Caldera clay project in Brazil, scrutiny of USA Rare Earth, falling lithium, high sulfur and phosphate costs, and a surprise USDA corn stocks report.

Materials Weekly

Week of October 4, 2026: Diesel Export Ban Shelved as Lynas Buys in Brazil and Corn Stocks Shock Grains

Materials Weekly: metals, critical minerals and farm inputs. Podcasts published September 27 to October 4, 2026.

Hello again. Last week ended with a question mark over a possible US ban on diesel exports. This week the White House stepped back from it, and Europe agreed to release emergency diesel stocks. Farmers still get little relief, though: diesel came off its record but stayed far above last year, and a surprise USDA report pushed corn prices down just as the harvest began.

In metals, Lynas, the largest rare earths producer outside China, finally gave us something to write about. It agreed to buy a Brazilian clay deposit in a deal that left its own shareholders with more questions than answers. Copper is still near record highs, and the argument over whether that can last got louder. One of the clearest bull cases and one of the bluntest bear cases both came on podcasts this week.

We drew on more than 100 podcast episodes this week. Here is what mattered.

TL;DR

• The diesel export ban is off the table for now. Trump said the US "would not impose a diesel export ban" (and then said it "was never on the table"). The G7 approved a 100 million barrel release of oil and fuel, front-loaded with diesel in the first 20 days. US retail diesel slipped from a record $6.529/gallon (week of September 21) to about $6.37 (Squawk on the Street, AG Bull, Wiesemeyer's Perspectives, FTR State of Freight).
• Underneath, the diesel shortage is still there. Rory Johnston says global supply is short about 2 million barrels a day. The extra profit refiners earn on diesel is still running near $90 to $120 a barrel, roughly five times normal (Facts vs Feelings, The David Lin Report).
• Lynas is buying Meteoric Resources' Caldera project in Brazil in an all-share deal worth about A$968 million. Lynas issues only about 6% new shares, and reserves rise about 80%. Lynas shares fell about 7%; Meteoric jumped about 44%. Big questions remain: Lynas has no permanent CEO, and earlier this year it had 4.5 months of takeover talks with a party it has not named (Money of Mine).
• USA Rare Earth has a $1.6 billion Commerce Department commitment but has received $0 so far, because it has not hit the required milestones (per its latest filings, reported by Bloomberg's Joe Deaux on Bloomberg Businessweek).
• Copper: J.P. Morgan stays "firmly bullish." China holds only about 75,000 tonnes of copper in onshore warehouses heading into peak season. The bank's target is about $15,000/tonne on the London Metal Exchange (LME) (At Any Rate). The bear case came from Adam Rosenzweig: prices are at all-time highs "with stockpiles growing, not shrinking" and China possibly on a "buyer's strike" (Barron's Live).
• A link most people are missing: J.P. Morgan says Chile relies on US diesel for more than 70% of its mining fuel. A US export ban would have hit copper supply as well as truckers (At Any Rate).
• Fertilizer: the head of The Fertilizer Institute put sulfur at $1,300 a tonne. Sulfur is needed to make phosphate fertilizer, and at that price, he said, "it doesn't make sense... to make MAP and DAP at $700." Anhydrous ammonia fell $92 a ton in a week, but phosphate kept rising (Farming the Countryside, AG Bull Fertilizer Update).
• Corn shock: USDA put September 1 corn stocks at 2.095 billion bushels. Traders expected about 1.92 billion. December corn fell about 21 cents in a day, to roughly $5.01, and lost 30.5 cents over the week (Grain Markets and Other Stuff, AG Bull).
• US-Canada: the September 29 checkpoint passed with no deal. A ban on nearly $1 billion of Canadian imports took effect, and the US Trade Representative says there is "no hurry" (Hudson Institute, AG Bull, Harvest Headwinds).

What's new

1. Copper: record prices, thin Chinese stocks, and a supply chain that runs on diesel

The bull case, from J.P. Morgan. On J.P. Morgan's At Any Rate podcast (Global Commodities: The final 11%, Oct 2), Natasha Kaneva and Greg Scheer, who heads the bank's base and precious metals research, kept a "firmly bullish" view and a path toward $15,000 a tonne on the LME. Their argument comes down to a few numbers:

• China's onshore "social inventories" are only about 75,000 tonnes going into October and November. Social inventories are the metal sitting in commercial warehouses, as opposed to government stockpiles. October and November are one of China's two seasonal demand peaks, and Scheer expects an "inflection point higher" in Chinese demand, driven by spending on the power grid.
• China's imports of copper concentrate, the partly processed ore that smelters turn into metal, are down about 3% year on year, even though global mine supply is flat. That pushes Chinese buyers toward refined metal instead.
• Chinese smelters are being squeezed. Fees for processing ore (treatment and refining charges) are lower, and the price smelters get for sulfuric acid, a by-product, has been "rolled over" onshore. A disrupted domestic scrap supply (tied to a tax invoicing scheme) adds to the pull on refined metal.
• Supply risks are piling up. About 4% of global mine supply faces possible strikes. El Niño is expected to bring wetter weather to Chile and Peru and drier conditions to the African copper belt. The concentrate market is "exceptionally tight."

In Scheer's words, the market is "already... on tenterhooks" and "quite susceptible to having some pretty strong bullish convexity." In plain English: small surprises could push prices up sharply.

The diesel link nobody is talking about. The same J.P. Morgan episode noted that Chile, the world's largest copper producer, relies on US diesel imports for more than 70% of the fuel its mines use. So when Washington spent two weeks talking about banning diesel exports, it was also, in effect, talking about Chilean copper output. That ban now looks off the table (see section 5), but the exposure is real and worth remembering if the idea comes back.

The bear case, plainly put. On Barron's Live (Sept 29), Adam Rosenzweig of Goehring & Rozencwajg was blunt. Copper is at an "all-time high nominal, all-time high real, with stockpiles growing, not shrinking, at high levels," and its "biggest consumer [is] potentially on a buyer's strike for the foreseeable future." His reasoning:

• China has been "overconsuming" for years and installed "as much copper as it could need for the next foreseeable future." Chinese demand has been "very, very weak" for 18 months.
• Three big mines are offline: Grasberg in Indonesia, Kamoa in Congo and Cobre Panama. Even so, "copper mine supply has been growing," because Chinese state-owned and private miners are "doing a bang-up job" of adding capacity.
• His conclusion: "there are unequivocally better risk-return opportunities in the market today." He hedged it: "Copper could move higher. It's possible the stocks do well."

A second skeptic. On Rock Stock Channel (Oct 2), Matt Fearnley of RK Equity said copper has "gone up far enough" in the near term, though he still owns smaller copper developers with high-grade projects that cost under $1 billion to build. He doubts the long-run "structural deficit" story. He pointed out that majors predicted in 2014 an 8 million tonne deficit by 2025, and it never happened. He also argued that Western consultants poorly track output from Chinese-run mines in Africa and China. He puts the "incentive price" (the price needed to justify new mines) at roughly $10,000 to $15,000 a tonne.

A third bear, from a different angle. On Wealthion (Sept 30), a Bloomberg commodity strategist named Mike called copper a "stock puppet." It trades at about twice the volatility of the S&P 500, and speculators' net bets equal 25% to 30% of all open futures contracts. "If the stock market drops 10%, copper probably drops 20%," he said. He expects a "pump then dump" like the one gold, silver and iron ore went through earlier this year.

The chart-watchers are mostly bullish.

• Dana Lyons said copper "has done nothing wrong for the last couple of years. Every pullback has been a buying opportunity." He holds "a healthy long position" and would add on any dip (KE Report, Dana Lyons).
• The KE Report hosts noted copper respects its 50-week average and "every dip should be bought." But COPJ, the junior copper miners ETF, still hasn't regained its February highs: "you would think with copper breaking new highs we'd be up in the triple digits already, and we're not" (KE Report QuickTake).
• TG Watkins tied his bullish view to AI: "the backbone of all this stuff is copper" (KE Report, TG Watkins).
• The Contrarian Capitalist put copper at $6.61/lb, down 2.3% on the week. It also relayed a Deutsche Bank forecast that copper could reach $10/lb by mid-2027. The host noted copper is the one metal not being dragged down by a stronger dollar (The Contrarian Capitalist).

Supply news. Nick Hodge said BHP's Escondida mine in Chile, the world's largest copper mine, was shut during the Beaver Creek conference (September 23 to 27) after a fatality. He called copper "the strongest metal of the major... base metal group, ahead of gold and certainly ahead of silver," and cited $700 billion to over $1 trillion a year of data-center spending (KE Report, Nick Hodge).

Big tech wants to buy copper directly. Sean Brodrick described hyperscalers (the giant cloud companies like Amazon and Google) "knocking on the doors of copper companies saying, how much copper can you give us?" He is looking for cash-rich producers planning to grow output 50% to 100%, ideally funded by long-term supply contracts with those tech buyers rather than by issuing new shares (KE Report, Sean Brodrick).

What the junior copper companies said (small explorers and developers, not yet producing):

• ATEX Resources (TSX: ATX) says its Valeriano copper-gold project in Chile is a roughly 2 billion tonne system. A higher-grade core of about 35 million tonnes runs 1.4% to 1.5% copper, starting 400 to 500 meters underground. Interim CEO Chris Spear pitches a "starter mine" of about 15,000 tonnes a day at 1.5% to 2.0% copper. He says the market values ATEX at about 1 cent per pound of copper in the ground, against 2 to 3 cents for peers. ATEX had $141 million in cash as of June. He also said Chile's new government is speeding up mine permits (Company Interviews, ATEX).
• Vizsla Copper reported 49.2 meters at 4.7% copper-equivalent at its Palmer project in Alaska. Only 3 of about 15 planned holes have reported so far, with more due October through December. Agnico Eagle took a 19.9% stake (Mining Stock Daily, Vizsla).
• Abitibi Metals (CSE: AMQ) has grown its B26 deposit in Quebec to 25 million tonnes at 2.15% copper-equivalent. It is targeting 30 to 35 million tonnes in the next update and expects about $34 million in cash at year end. Its market value rose from $40 million to about $170 million in a year. CEO John DeLuce called $10/lb copper "very realistic." He also noticed Australian funds buying into the story for the first time (Company Interviews, Abitibi).
• Silvercorp is building its El Domo copper-gold mine in Ecuador ($284 million capital cost, with Wheaton funding $175 million) for July 2027 start-up. At $5/lb copper it should add about $200 million a year in revenue, about half of it from copper (Company Interviews, Silvercorp).

Robert Friedland's keynote. Money of Mine played clips from Friedland's talk at Mining Forum Americas. He promoted Ivanhoe Electric ("don't say I didn't warn you") and Sunrise Energy Metals (ASX: SRL), which he said is up about 50-fold in two years on scandium. His line on how mines are valued: "Why are we still running net present value models on mining when if you don't have the metals to defend yourself, you are dead" (Money of Mine).

2. Rare earths and export controls: Lynas makes a move, USA Rare Earth gets scrutiny

Lynas buys Meteoric, and shareholders push back. We have flagged for three weeks that Lynas and MP Materials barely come up on podcasts. This week Lynas made up for it. On Money of Mine (Oct 3), Travis and JD walked through the deal:

• Terms: Lynas will buy Meteoric Resources and its Caldera ionic clay rare earths project in Brazil for about A$968 million, paid entirely in Lynas shares. Ionic clay is a soft, clay-hosted type of deposit, historically mined mostly in southern China, that tends to be cheaper to process. Because Lynas shares are so highly valued, it only needs to issue about 6% new shares, and its reserves rise by about 80%. Meteoric stock jumped about 44%; Lynas fell about 7%.
• The claim: Caldera is "the biggest of its kind in the world outside of China."
• The awkward part: Lynas has no permanent CEO. Longtime chief Amanda Lacaze announced her exit in January and left in June. A Reuters report said Lynas paused the search for a successor for 4.5 months because of "change of control discussions" with a party it has not named. The deal was presented by chair John Humphrey and interim CEO Paul.
• Fund managers pressed hard. Sam Berridge asked who "owns this decision if it turns out that the Meteoric resource doesn't quite perform up to its DFS numbers," meaning the project's detailed feasibility study. The chair said the decision belongs to the executive team and the board, and that waiting for a new CEO meant "the opportunity... may well have got away." Another analyst asked how Meteoric's clay would fit into Lynas's existing processing plants in Malaysia. Lynas said the material has been tested through its flowsheet (the step-by-step processing route), but integration details will come after the deal closes.
• No "fiduciary out" for Lynas. That clause would let Lynas walk away if a better offer for Lynas itself arrived. Its absence matters given the earlier mystery talks.
• The hosts' theory, which they flag as unproven: the earlier suitor "can only really be MP Materials." The two discussed a merger in 2024, and it fell apart. In this telling, the Meteoric deal is "Plan B," possibly done to stop a rival from getting Caldera first. In fairness, JD said he doesn't have "a very good read on if this is a good deal or not."

USA Rare Earth: big headline numbers, but no cash from Washington yet. On Bloomberg Businessweek (Sept 28), Bloomberg's Joe Deaux reported on the company's year:

• It won a $1.6 billion commitment from the Commerce Department and raised $1.5 billion from private investors alongside it. Cantor Fitzgerald and Moelis earned about $50 million in fees for arranging that raise. Cantor says its role began before Howard Lutnick became Commerce Secretary, and Commerce denies that Lutnick discussed rare earths with Cantor.
• Its market value went from $464 million at its March 2025 listing to about $5.8 billion.
• But "zero dollars have been disbursed" of the $1.6 billion, because the company has not met the milestones. Its Brazilian mine, Cerro Verde, made only $2.5 million in revenue in 2025 and runs at a loss. Deaux relayed industry sources calling the Round Top deposit in Texas "a mound of dirt." He said Cerro Verde has processing problems: "you have to send a ton of water through this deposit... the screens are ripping."
• His careful conclusion: "If there's enough money to make them work in enough time, maybe they can make them work."

The truce is a "compliance period," not a fix. On The Northern Miner (Sept 30), host Adrian Pocobelli recapped the two-month extension of the US-China trade truce to January 10, 2027. Beijing wanted it extended to January 2029. US Trade Representative Jamieson Greer called the next two months a "compliance period to assess whether Beijing follows through." Former Trump trade official John Lange said Washington wants short extensions as "checkpoints that condition continued restraint on Chinese rare earth export performance." The joint statements after the summit did not mention more rare earth exports to the US. US Ambassador David Perdue warned that China has "weaponized its dominance over critical minerals."

The Pentagon's January 1 deadline. On POLITICO Energy (Oct 2), Hannah Northey explained that from January 1, 2027, defense contractors cannot deliver weapons containing tungsten, tantalum or rare earth magnets from China or other adversary countries. The Aerospace Industries Association, which represents Boeing, RTX, Northrop Grumman and General Dynamics, says it cannot trace its full supply chains in four months. MP Materials, through its lobbyist, argues contractors have "had years' notice." Northey expects the administration to grant waivers anyway.

What Washington is funding. Audrey Robertson, the Energy Department's Assistant Secretary for critical minerals, gave a striking number: "We had 163 mining engineers graduate last year. In the same year, China had 3,000." She launched PROSPECT, a program that challenges mining schools to double their graduates within 24 months. She also mentioned a $500 million funding round for battery metals, $162 million already deployed for processing demonstration projects, and new Commerce Department export restrictions on black mass, the shredded material from old batteries that recyclers turn back into metals. "Processing," she said, is "a single point of failure" (The Northern Miner).

Price gaps show the shortage. Don Schwartz, CEO of Rare Earths Americas, which listed on the NYSE in May, said ex-China prices for the heavy rare earths terbium and dysprosium reached as much as 14 times Chinese prices as stockpiles from before the export ban ran down. He estimates the West needs "somewhere between 10 and 20" new projects of meaningful size in the next decade. On MP Materials, he said it is "very heavy on light rares, very light on heavies," which becomes a bottleneck as magnet output grows. He also credited the price floor in MP's government deal: "having some visibility around pricing really does matter" (Dig Deep).

Tungsten is up tenfold. Oliver Friesen of Guardian Metal Resources said tungsten has gone from about $300 to about $3,000 per MTU (metric ton unit, the standard unit for pricing tungsten) since China's export ban. The US has no operating tungsten mine. Guardian targets 3,000 to 4,000 tonnes a year from two Nevada projects before the end of 2028, or 25% to 35% of US demand, which is about 12,000 tonnes a year (Energy Transition Solutions). Defense adviser Frank Finelli of Carlyle said China controls 85% of processed tungsten, and that critical-mineral prices outside China run about twice Chinese prices (Emerging Tech Horizons).

Canada builds capacity. Teck is considering up to $850 million of upgrades at its Trail smelter in British Columbia to produce more germanium and antimony, and possibly gallium. The Canada Growth Fund is ready to invest up to $400 million, the first deal under the new Canada Critical Minerals Accelerator. Meanwhile, Sherritt's nickel-cobalt refinery in Alberta has been idle since June because its Cuban feedstock dried up (Hub Podcasts).

The bottleneck is processing. Claire Lee of Moody's said China had about 60% of rare earth mining in 2024 but 90% of refining. The US had 10% of mining and just 1% of refining. "The bigger challenge is everything that has to happen after mining" (Logistics Matters).

3. Battery metals: lithium falls back, but deals keep coming

Lithium dropped about 25%, and Galan took the hit. Autoline Daily put lithium carbonate's fall at about 25%, from $24,000 to $18,000 a tonne, blaming weak Chinese EV sales and too much battery capacity (Autoline Daily). Joe Lowry, host of the Global Lithium Podcast, says prices fell from a May peak of 200,000 to 209,000 yuan. He still doesn't think "we're going back to 50,000 RMB... anytime soon," because new capacity needs prices in the mid-teens (thousands of dollars per tonne) or higher just to break even (Global Lithium Podcast).

• Lowry admits Chinese EV sales have fallen year on year for several months, and Chinese battery-storage installations fell more than 16% in the first half. More than 60% of those projects are at break-even or losing money. His pushback: "demand is outside of China," so reading lithium only through China is "myopic."
• He argues "China needs Argentina more than Argentina needs China." Argentine brine producers (which pump lithium-rich salt water) sit lower on the cost curve than Chinese converters that buy ore on the open market.

The restocking case. Matt Fearnley said Chinese inventories of lithium chemicals are already "quite low." If they keep falling after the National Day holiday, "we'll be at less than a month," which could set off "quite a major short covering rally" (a fast rise as bearish traders buy back). The risk: battery-storage inventories have "spiked up again" (Rock Stock Channel).

Deals and project decisions. The same Rock Stock episode listed:

• Standard Lithium raised Trafigura's purchase commitment from 8,000 to 12,000 tonnes. That takes its total to 20,000 tonnes under 10-year take-or-pay contracts, meaning the buyers pay whether or not they take delivery. That is a key step toward a final go-ahead on the project, which we flagged as a gap last week.
• Liontown made its final investment decision on expanding Kathleen Valley.
• Rio Tinto says it is "full steam ahead" on its $2 billion Rincon project in Argentina, which uses direct lithium extraction (DLE), a newer method that pulls lithium straight out of brine.
• Lithium Argentina's Phase 2 study assumed only $18,000/tonne for lithium carbonate. That is well below the $22,400 to $22,500 used by Standard Lithium and Vulcan, yet it still showed about a 28% internal rate of return.

Galan Lithium fell about 20% in two days to about A$0.30, a market value of about A$400 million. Severe winter in Argentina's Puna region pushed its first 4,000-tonne run rate back to the first half of 2027. CFO Ross Dinsdale: "Lithium price could fall by another 50% and this operation would still be profitable." Managing director JP Vargas bought about 2.3 million shares weeks before the sell-off (Rock Stock Channel).

Cobalt's uranium problem. On The China in Africa Podcast (Oct 2), Princeton researcher Ryan Manzuk said Congo's cobalt exports to China carry an estimated 2,000 to 5,000 tonnes of uranium. The cobalt mineral heterogenite naturally "grabs onto and holds onto uranium." The international limit is 75 parts per million. Shipments from the Tenke Fungurume mine, run by China's CMOC, were "often above 200 ppm, approaching 1,000 ppm." Congo's mines ministry responded with a decree requiring companies to declare all by-products. Separately, Congo's ambassador to the US, Yvette Kapinga Ngandu, said her country holds about 20 of the 60 minerals the US calls critical, and that the US-Congo partnership is meant to move "beyond extracting minerals" (13th & Park).

Other signals. CoreShell won a $50 million Energy Department grant for the first US gigafactory making only silicon anodes, a replacement for graphite, almost 95% of which "runs through China" (From The Dive Shop). Cornish Lithium is aiming for a final investment decision in 2027 against a UK goal of 50,000 tonnes a year of domestic lithium by 2035 (Dig Deep). Bloomberg Green's Akshat Rathi said battery packs now cost about $108 per kilowatt-hour, down more than 75% in a decade (The Climate Question).

4. Steel, aluminum and tariffs: a mega-mill for Iowa, a stalemate with Canada

A $15 billion steel mill in Iowa. Trump announced a mill run by Mesabi Metallics, owned by an Indian conglomerate. It is designed to make about 10 million tons of steel a year, roughly a tenth of US output, using iron ore from a federally backed mine in Minnesota. It promises 1,700 permanent jobs. First steel is not expected until 2030. A commentator on NTD Evening News said a site had not yet been chosen and funding was still being worked out. For scale, the same broadcast put China's output at about 960 million tons a year, against about 83 million for the US. Morning Brew called it "the first new mega-steel plant... since the 1960s." The 50% tariffs on steel and aluminum survived even after the Supreme Court struck down other tariffs. The steel industry credits them with "more than $40 billion in investments," and in a September 26 letter warned that weakening them "would put that progress at risk." The cost: steel prices rose 10.4% between April 2025 and April 2026 (Morning Brew Daily, POLITICO Energy).

Tariffs reach the oil patch. California oil producer Chad Hathaway said steel well casing costs are up 130% because of tariffs, and overall contracting costs are up 60% (The Moneywise Guys).

US-Canada: no deal. On Hudson Institute's podcast (Oct 1), Matt Boyce noted that "a ban on nearly one billion worth of Canadian imports took effect" days earlier. Shuvaloy Majumdar, the Conservative opposition's shadow minister for US relations, said "90,000 Canadian jobs are directly impacted today." He called the tariffs on steel, aluminum, lumber and autos "permanent tariffs that have a floor and not a ceiling." Rather than retaliate, he wants Canada to build pipelines and develop its minerals. Greer says there is "no hurry" to resume talks, and Prime Minister Mark Carney says he is ready to negotiate "in good faith" (AG Bull, Harvest Headwinds).

Alcoa as a tariff bet. Brian Glenn of Premier Path Wealth Partners called Alcoa "a protected domestic industry" at about 8 times earnings and 6 times forward EBITDA (a measure of operating profit), down 21% this year. His caveat: aluminum's role in AI is "very, very small." The real driver is upgrades to power lines. Aluminum trades below $3,000 a tonne against copper above $15,000, while carrying about half of copper's electrical capacity (Schwab Network).

5. Fertilizer, diesel and the farm: some relief at the pump, more pain in phosphate

Diesel: the ban that wasn't. Here is how the week unfolded.

• Sept 27-28: Trump said he was considering a ban "very seriously." Energy Secretary Chris Wright warned it could "raise gasoline and jet fuel prices." Jim Wiesemeyer called it "Trump's etch-a-sketch energy policy" (AG Bull, Wiesemeyer's Perspectives).
• Sept 30: The Financial Times reported "crisis talks" at the White House (Bloomberg Surveillance).
• Oct 1: PIMCO's Libby Cantrell said the ban was "on ice for now" (Bloomberg Surveillance).
• Oct 2: The G7 approved a 100 million barrel release with a "front-loaded substantial diesel release within the first 20 days." Trump posted that "Europe has just agreed to release a massive amount of their heavily stocked diesel oil." Heating oil futures (the benchmark for diesel) fell about 4% to 5% (Squawk on the Street).
• By Friday: US diesel futures closed 3% lower at $4.50 a gallon, and Trump said the US would not impose a ban. Wiesemeyer heard him say on Fox that it "was never on the table." His response: "President Trump himself pushed a diesel export ban for a few weeks... I don't think he can say it was never on the table" (AG Bull, Wiesemeyer's Perspectives).

Why a ban scared people. RBN Energy laid out the math. The US makes more than 5 million barrels a day of diesel but uses fewer than 4 million. Exports since July averaged about 1.7 million barrels a day. Stopping them would pile up about 11 million barrels a week at home. Refineries would then cut runs, which means less gasoline and jet fuel too. Mexico gets about 40% of its diesel from the US. "A policy aimed at increasing domestic fuel availability today could leave the US with less refining capacity... down the road" (RBN Energy). Kirk Lyons on Big Digital Energy pointed to the 1973 soybean export ban: "What happened to the soybean market in the US? Destroyed." GasBuddy's Patrick DeHaan said a ban would "incrementally lower diesel prices at the expense of a surge in oil prices" (The Exchange).

The shortage underneath. Rory Johnston of Commodity Context says global diesel is short about 2 million barrels a day: about 1 million from the Middle East and Red Sea, plus Russia, whose refining is roughly halved by drone attacks. US diesel exports are up about 50% to roughly 1.5 million barrels a day. The "crack spread," the gap between the price of crude oil and the diesel refined from it, is $90 to $115 a barrel, about six times the pre-2022 norm of $20. US refiners are "printing gold bricks" (Facts vs Feelings). S&P Global's Rebecca Foley said up to 60% of Russian refining capacity is offline. Russia's diesel export ban runs to the end of October for large refiners and January 2027 for non-producers. European diesel has topped "$200 a barrel in some markets" (Oil Markets). Kpler's Michelle Brouhard put the odds at 25% for a US export ban, 50% that US pressure forces Europe to release reserves (which then happened), and 25% that the market corrects on its own (Oil Ground Up).

The pump price. FTR's Avery Weiss said US diesel fell 14.7 cents to $6.382 a gallon in the week of September 28. That ended four straight weeks of records, though it was still "the second highest weekly average ever." Distillate inventories were flat when they should be building for winter and harvest (FTR State of Freight). The record $6.529 came the week of September 21.

What farmers actually pay. The American Farm Bureau says farm diesel rose from $3.01 a gallon in September 2025 to $5.61 in September 2026. That adds about $2,227 to harvest fuel for an average 279-acre corn farm (AG Bull, Harvest Headwinds). Rail fuel surcharges went from about $100 per railcar to $300 to $350 (AgriTalk). Arkansas budgets assumed diesel at $2.46 a gallon, "less than half the price now prevailing." Arkansas joined Alabama, Louisiana, Nebraska, Oklahoma and Texas in allowing farmers to use cheaper dyed (untaxed, normally off-road) diesel (Arkansas AgCast). Indiana did the same through November 4. A state representative warned that IRS penalties start at $1,000 if a truck crosses into a state without the exemption (Hoosier Ag Today).

The UK feels it too. UK farmers pay £1.18 a litre for red diesel, up 40% from a year ago. About 30% of UK diesel comes from the US. Hauliers are "going out of business or giving up," just as importers rush fertilizer in ahead of the EU's carbon border tax, which starts January 1 at an extra 6% to 7% (Farming Today). UK pump diesel topped the June 2022 record at 199p+ a litre (Wake Up to Money).

Sulfur: the phosphate problem. Corey Rosenbusch, president of The Fertilizer Institute, laid it out on Farming the Countryside (Oct 1):

• Sulfur is at $1,300 a tonne, because the closure of the Strait of Hormuz cut off about half the world's traded sulfur. Phosphate fertilizers like MAP and DAP need sulfuric acid, which is made from sulfur. "It doesn't make sense for $1,300 sulfur to make MAP and DAP at $700." He said global phosphate output could be "down as much as 30 million metric tons" next year.
• China's urea production is "up 30%", and China is preparing to "come back into the marketplace in a pretty big way." He speculated that China may be "intentionally manipulating fertilizer markets."
• Belarus potash is arriving again after sanctions were lifted, but it is "not significantly cheaper" and won't replace Canadian supply. He read Trump's Belarus post as "poking the bear a little bit in Canada."
• New US plants are years away. USDA's $500 million FIELDS program funds about one "environmental feasibility study for one plant," when "an ammonia plant will cost $4 to $5 billion."

The weekly price sheet. Davis Michaelsen's fertilizer update on AG Bull (Sept 30):

On phosphate: "I don't like the setup here one dang bit." His fertilizer price index is up 8.64% from a year ago, against expected new-crop corn revenue up 13.83%, so they are converging, but "either corn needs to come up pretty hard or the entire fertilizer complex needs to come down hard." USDA's market service reports anhydrous at $900 a ton (Closing Market Report).

Use less nitrogen. University of Illinois economist Gary Schnitkey cited data from more than 500,000 acres showing profit peaks at 151 to 175 lbs of nitrogen per acre ($409/acre). Above 225 lbs it drops by $35/acre. Yet 60% of the farms studied apply over 200 lbs, averaging 204. His advice at $5 corn: "think about cutting rates" (Closing Market Report). On Ag PhD, Brian Hefty priced urea nitrogen at about 65 cents a pound against an all-time high near $1. He noted phosphorus is "close to the all time high" (Ag PhD Daily).

Farmer mood. Krista Swanson, chief economist of the National Corn Growers Association, said only about 1 in 10 growers expect a "clearly profitable" 2026 corn crop, and more than 90% say finances are the same or worse than last year (AG Bull).

The corn stocks shock. USDA put September 1 corn stocks at 2.095 billion bushels, up 35% from a year ago and about 170 to 177 million bushels above what traders expected. December corn fell about 21 cents, to roughly $5.01. Joe Vaclavik blamed an inflated "feed and residual" figure (USDA's catch-all estimate of grain fed to animals or otherwise unaccounted for) of 6.35 billion bushels: "Feed is a giant black hole... It's a fudge number." He expects the October 9 USDA report to push next year's projected leftover corn to about 1.74 billion bushels, or 10.8% of annual use (Grain Markets and Other Stuff). Over the week corn fell 30.5 cents and soybeans more than 40 cents (AG Bull).

Soybeans left out of the China deal. China cut tariffs on US wheat, corn, sorghum, barley, rice and beef but kept an extra 10% tariff on soybeans for private buyers. Vaclavik's take: "Soybeans are a big point of political leverage for China." State buyers have taken more than 10 million tonnes and keep buying. Funds held a record 265,000-contract net long position in soybeans (bets that prices will rise), which raises the risk of a sharp drop if they sell (Grain Markets and Other Stuff).

The debate

1. Is copper's rally built on real shortage or on positioning?

• Shortage: China has about 75,000 tonnes in onshore stocks going into peak season, concentrate is "exceptionally tight," and several big mines are disrupted (Escondida after a fatality; Grasberg, Kamoa and Cobre Panama offline). That is J.P. Morgan, Hodge and Lyons.
• Positioning and a weak China: stockpiles are "growing, not shrinking," China may be on a "buyer's strike," Chinese-run supply is under-counted, and speculators hold big bets. That is Rosenzweig, Fearnley and the Bloomberg strategist on Wealthion.
• Our read: the bulls have the near-term data on Chinese inventories. The bears have the better argument on how much risk is already priced in. Watch Chinese buying after National Day (October 1 to 7). If onshore stocks build instead of draw, the bears gain ground.

2. Did killing the diesel ban fix anything? Not really. The G7 release and the reversal ended a policy risk, but Johnston's 2 million barrel a day gap is unchanged. Kpler's Amena Bakr warned on Squawk on the Street that the release will "buoy prices" later because "you're going to have to refill all of those inventories." Garrett Toy of AgTraderTalk thinks diesel may not get back to "normal" until "end of 2027 into 2028," even if the Middle East war ended today (Commodity Week).

3. Is Lynas buying growth or buying defense? The bull case: 80% more reserves for 6% dilution, plus the largest ionic clay deposit outside China. The bear case: a deal pushed through by an interim team, unclear processing integration, no fiduciary out, and a 4.5-month pause in the CEO search for talks with an unnamed party. Even the Money of Mine hosts, who like the asset, called the timing "Plan B."

4. Should Washington fund rare earths faster or more carefully? USA Rare Earth shows the tension. Investors put $1.5 billion in on the strength of a $1.6 billion federal pledge that has not paid out a dollar, and industry sources question the deposits. On the other side, Robertson and Schwartz argue that price floors and cost-sharing are the only way to finance processing in the West. Finelli's sober estimate: "if we can get this in place in five years, it'll be great."

The names in play

Still missing from podcasts: CF Industries, Nutrien and Mosaic (now four weeks running), plus Nucor, Steel Dynamics, Cleveland-Cliffs and Freeport-McMoRan management.

Read-throughs

• Copper miners with operations in Chile: the dependence on US diesel (more than 70% of mining fuel, per J.P. Morgan) has been a hidden risk to costs and output. The ban being shelved removes the immediate threat. Fuel cost is still a pressure on margins.
• US refiners: the export ban was their biggest risk, and it is gone for now. Profits on diesel stay huge, about $90 to $120 a barrel, but the G7 release and any loosening of Chinese export quotas could narrow them. Johnston says 500,000 barrels a day of extra Chinese diesel could cut the spread by $30 to $40 a barrel (The David Lin Report).
• Phosphate producers versus nitrogen producers: sulfur at $1,300 squeezes anyone who has to buy it to make phosphate. Producers with their own sulfur supply benefit from scarcity pricing. Nitrogen prices are falling because China's urea output is up 30%.
• Grain shippers and railroads: fuel surcharges have tripled, which mostly hits farmers through lower local grain prices (wider "basis"). Weak harvest-time basis is likely to persist (Closing Market Report).
• Western rare earth developers: the Lynas-Meteoric price (about A$968M) gives a market value for large ionic clay projects in Brazil. Rare Earths Americas, and Viridis (which the Money of Mine hosts mentioned alongside the deal), now have a new comparison point.
• Defense supply chain: the January 1, 2027 Pentagon sourcing deadline and the January 10 truce deadline fall ten days apart. Expect waiver news and pressure on magnet makers in December.
• Gold miners: Tony Greer warned that "if diesel stays seven and a quarter, GDX is going to go back to 30," which shows how fuel costs weigh on miners' margins (The Competent Investor).

What changed since last week

Watch next week:

• USDA crop report on October 9
• Chinese buying after Golden Week (China returns October 8)
• Whether the G7 diesel actually arrives within the promised 20 days
• Any US executive order on dyed diesel
• Russia's diesel export ban, due to expire at the end of October
• A possible Fed rate hike (markets put the odds at 50% to 70%)
• US midterms on November 3