Soybean oil prices in Chicago rose 5.6% after a meeting to discuss increasing the biofuel mandate for the US

U.S. soybean oil futures and RIN credit prices rose sharply this week after oil and biofuel industry officials began discussing increasing biofuel blending mandates to present their proposals to the Trump administration. But the price hike is purely speculative, as such a move would raise fuel prices by 10-15%, something Trump had promised to reduce before the election.

May soybean oil futures on the Chicago Board of Trade yesterday rose another 5.6% to $1,046/t (+12.3% for the week) amid talk of increased biodiesel production in 2026, although traders are not yet factoring in the possible impact of the US “trade war” against all countries starting on April 2.

May soybean futures rose only 1.9% yesterday to $380/t (+3.3% for the week), confirming the speculative rise in oil prices.

The volume of soybean processing in the US in February decreased by 11% compared to January to 5.143 million tons, which is 2.3% lower than in February 2024, while soybean oil stocks increased to 873 thousand tons.

On Tuesday, representatives from the U.S. Oil and Biofuels Coalition and the Environmental Protection Agency (EPA) met to discuss the need to increase the mandate for blending biofuels with diesel.

The agency plans to introduce new biofuel blending quotas for the Renewable Fuel Standard (RFS), the first step in Trump’s promised support for the biofuel industry.

Biofuel producers Big Oil and Farm Belt are competitors in the US fuel market, but they are now working together to reach a consensus at the request of the White House to avoid the problems that arose during Trump’s first term.

According to Reuters, the coalition, led by the American Petroleum Institute (API), is pushing for a biofuels mandate of 5.5 billion to 5.75 billion gallons, compared with the current level of 3.35 billion gallons, which is well below capacity. The coalition has so far agreed to a mandate for blending corn-based ethanol of 15 billion gallons, although some have pushed for it to be increased to 15.25 billion gallons.

Part of the coalition, represented by small refiners, opposes high biofuel content in fuel, saying it would lead to “job losses and higher fuel prices.” Representatives of truck park operators and fuel retailers question the need to increase biodiesel quotas without reinstating the blending tax credit, which expired in December.

They believe that this credit helped lower prices for consumers, and its replacement, the tax credit for producers (45Z), has proven ineffective and incomplete. Therefore, eliminating the credit would not only worsen the financial situation of Americans, but also create political problems for the White House.