Chicago soybean oil futures fell sharply in late August as uncertainty over US biodiesel policy weakened the market’s principal demand driver. December futures had risen 6.4% between August 1 and 20, but declined 5.3% by August 26 to $1,491/t, equivalent to a 2.7% monthly loss while remaining 30% above year-earlier levels.
The decline accelerated after the US Environmental Protection Agency said it would extend, for either 30 or 90 days, the deadline for refineries to demonstrate compliance with their 2025 Renewable Fuel Standard obligations. The EPA is also expected to decide by the end of August on small-refinery exemption applications that could release 1.2-1.8 billion RINs, increasing biofuel credit availability. Biomass-based diesel RINs fell to $1.92 on August 24, their lowest level since April.
South American physical values were reported at $1,191/t FOB Up River for Argentine soybean oil and $1,196/t FOB Paranagua for Brazilian product for October shipment. The policy uncertainty is relevant to global vegetable-oil trade, including sunflower and rapeseed oil competitiveness in Europe and the Black Sea, although the direct regional impact remains uncertain.