June 17

6/17 - It was expected that new refining techniques - which allow renewable diesel to be made from 100% veg oil and be indistinguishable from petroleum-based diesel - would send soy oil prices sharply higher. But soy oil prices have weakened instead, mostly because lower carbon intensity oils (canola, animal fat, used cooking oil) have been in higher demand for biofuel. U.S. imports of used cooking oil (UCO) more than tripled in 2023 from a year earlier, with more than half coming from China. If the U.S. gov’t tightens the screws on UCO imports, soy oil prices could move sharply higher in a hurry. The USDA has lowered its 2023/24 soy oil price forecast from $.63 to $.48/lb over the past 8 months and is projecting 2024/25 at $.42. Soy oil futures, which hit $.72/lb in late July 2023, have been steady in the low $.40s ($.4368 on 6/14). Forward futures contracts for the 2nd half of 2024 are averaging $.4387; 2025 are $.4408/lb.