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Soybean oil futures stay rangebound as biofuel supply swells
Biofuel imports nearly doubled after the EPA’s 2026 to 2027 RFS diesel mandate announcement, pushing available soybean oil supply into surplus and capping gains.
Soybean oil futures have largely stayed rangebound since mid-July, trading mostly between the mid-60¢ and mid-70¢ per pound range, even as CME soybean futures reached three-year highs in early September and West Texas Intermediate crude hovered near or above $100 per barrel.
World Grain reports that the main driver is a supply and demand balance rather than moves in related markets. The EPA set record-high biomass-based diesel mandates for 2026 and 2027 under the Renewable Fuel Standard, and signaled imported feedstocks would continue to receive full credit value through at least 2028, encouraging biofuel producers to expand both feedstock and biodiesel purchases.
From January to March, imports of finished biodiesel totaled about 39,164 tonnes. From April through June, after the announcement, finished biodiesel imports jumped to 79,764 tonnes, while domestic soybean oil production also increased, contributing to a surplus that dampened price strength.
The outlet adds that seasonal downtime at soybean processing plants has had limited impact, in contrast with soybean meal futures, because the market is finding a defined price “parameter,” with buyers willing to hold at those levels given the RFS program. World Grain also notes that EPA compliance exemptions for several small refineries have added uncertainty to near-term biofuel demand expectations, helping keep soybean oil futures confined to their recent range.
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