BOPO Risks a Repeat Downturn as Soybean Oil Crumbles
Soybean oil’s deteriorating position continues to weigh on BOPO, though a repeat of Q4 2024’s collapse to –200 versus palm oil does look likely at this time. Palm itself is under heavy pressure, with export demand slowing more quickly than domestic consumption can absorb with increasing soft oil competition. Still, a slide towards less than –200 by December is now a real risk unless soybean oil finds a buyer of last resort. The U.S. export picture remains dire, with trade flows to China non-existent and record carries forcing beans either into storage — if space is available — or into the hands of crushers. Nearby bean spreads are already deeply discounted (Nov/Jul is –60 c/bushels), while U.S. soy crush margins are collapsing, leading crushers to wait for basis to give way. The impact is already felt in RINs today, with D4s falling to 0.971 $/gal and Dec-26 at 1.02.
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