By Subramani Ra Mancombu
Soyabean oil prices have surged over 30 per cent so far this year, outperforming gold, silver and copper. This increase is largely due to the US Environmental Protection Agency鈥檚 (EPA) proposed Renewable Fuel Standard (RFS) volume targets for 2026 and 2027.
Only cobalt (37 per cent) has gained more than soyabean oil, but its rise has mainly been due to an export ban imposed by the Democratic Republic of Congo from February this year.
While soyabean oil has increased, soyabean meal prices have dropped by nearly 14 per cent since January 2025.
Meeting obligations
Research agency BMI, a unit of Fitch Solutions, said over the past month, the price movements in the soyabean complex have been opposite, with soyabean oil futures closing the June 30 session up 11.8 per cent month-on-month (m-o-m), in contrast to the 8.1 per cent m-o-m decrease posted by soyabean meal prices.
鈥淭he proposal (EPA鈥檚) points to higher targets for domestic biomass-based diesel (BBD) and also includes changes to the Renewal Identification number (RIN) policy, which will make imported fuels or fuels made from imported feedstocks count for half as much in meeting compliance obligations. In line with this, the EPA now forecasts soybean oil use in the BBD pool to increase by around 250 million gallons/year over the outlook period,鈥 said BMI.
On July 1, the US Senate passed the 鈥淥ne Big Beautiful Bill Act鈥, which will only allow clean fuel production credit to be accessed with fuel derived from feedstock produced or grown in the US, Mexico or Canada.
Current prices
CBOT-listed second-month soyabean meal prices closed the June 30 session at 275.8 US cents a bushel, almost a 21 per cent year-on-year decrease in prices. Soyabean oil August futures closed at 54.55 cents per pound.
According to the Solvent Extractors Association of India, the landed cost of degummed soyabean oil, cost and freight at Mumbai, was $1,180 a tonne last week compared with $1,054 a year ago. In comparison, soyabean meal prices for export were quoted at $390 a tonne free-on-rails compared with $489 a year ago.
Alan Brugler, A&N Economics, told Agweb.com that soyabean oil got support from the recent $5 rally in crude oil, but it was mostly a reaction to the EPA鈥檚 proposed renewable volume obligations that were bullish for biomass-based diesel.
EPA raising the levels 67 per cent from 2025 to 5.61 billion gallons for 2026 and to 5.86 billion gallons for 2027 were above the 5.25 billion gallons the industry recommended for 2026.
Positive impact
The US Department of Agriculture said following price fluctuations due to RVO, US soyabean oil prices maintained a premium.
Brugler said most of the (oil) growth is being used in the US and has been in the biofuels, not exports. 鈥淪o this is positive for beans. It will impact the new soyabeans crop. Prices will have to move higher to factor in the higher volumes,鈥 he said.
BMI said expectations of abundant global supplies have contributed to keeping a cap on prices, with its estimates for 2024-25 being a 5.2 per cent year-on-year (y-o-y) increase in production. 鈥淲hile we forecast that soyabean production will decrease by 1.01 per cent y-o-y in 2025-26, we also expect the production balance to widen to 5.2 million tonnes from the 4.2 million tonnes estimated for 2024-25,鈥 it said.
Bearish for meal
Brugler said soyabean oil could trade at 60 cents or lower if 鈥渙il is high enough.鈥 Soyabean November futures could rally given the surge in oil and the forecast of a lower acreage for 2025-26. This will result in a $9 per bushel floor price for soybeans on the Chicago Board of Trade. However, prices could rise to $12 and above next year.
On the other hand, BMI said China announced a target to lower soyameal content in animal feed to 10 per cent from 13 per cent by 2030. The expected decrease in Chinese demand and ongoing trade tensions in the US are bearish factors for soyabean meal prices.
Published on July 7, 2025