Soybean oil prices fell 6% on the day on rumors that the US authorities are against increasing tax breaks for biofuel producers

A two-month speculative 25% increase in soybean oil prices was triggered by the preparation by representatives of the oil and biofuel industries of a bill to increase biofuel blending mandates in the US to 5.5 billion gallons by 2031, while the current level is 3.35 billion gallons.

However, it is known that the Trump Administration does not support “green energy”, and yesterday information emerged from lawmakers that the target for renewable diesel volumes for next year, which is currently being discussed, will be significantly lower than the 5.25 billion gallons proposed by the alliance of oil and biofuel producers.

July soybean oil futures in Chicago fell 6% yesterday to $1,088/t, but are trading 2.9% higher than a month ago and 17.6% higher than two months ago, so have the potential to fall.

The agreement between the US and China to reduce tariffs earlier this week led to a sharp rise in soybean and soybean oil prices, but the realization that even a 10% tariff makes American soybeans uncompetitive compared to Brazilian soybeans has put renewed pressure on prices.

July soybean futures in Chicago fell 2.5% yesterday to $386.2/t (0% for the month, -1.8% for two months).

Negotiations between the US and Iran, which could lead to the lifting of US sanctions against Iran, are pushing down oil prices, limiting biofuel production margins and putting pressure on soybean oil prices.

Falling soybean oil prices amid low palm oil prices due to seasonal production increases are pushing down sunflower oil prices. Therefore, confirmation of increased sunflower plantings in the Black Sea countries in June could cause new crop sunflower and sunflower oil prices to collapse.

Vegetable oil stocks in Indian ports and pipelines as of May 1, 2025, decreased to a 5-year low of 1.35 million tons due to a 24.3% reduction in palm oil imports in April compared to March to a 4-year low of 321.5 million tons. Against this background, palm oil quotes in Malaysia fell to $900/ton, so in the coming months, Indian importers will increase purchases of cheap palm oil, which will reduce demand for expensive Ukrainian sunflower oil, especially against the background of increased offers from Argentina.

Tags: prices, soybean oil