China’s Record Vegoil Stocks Weigh on Global Biofuels

The most striking development today comes out of China, where soybean and vegetable oil stocks have reached year-highs, with port inventories of soybeans hitting a new record of 9 million tonnes. Crush margins for the old crop remain very poor, leaving crushers with little appetite to take on more beans. This builds on a familiar seasonal pattern but highlights that China’s import demand may stay muted in the near term, adding weight to global balances.

In the U.S., crop progress shows corn and soybeans are maturing slightly slower than last year, though overall conditions remain favorable at 69% and 65% good to excellent, respectively. The weather has held up well, and while a delayed pace could stretch harvest pressure later into the fall, the strong condition ratings underscore the resilience of this year’s crop.

Biofuels continue to struggle. D4 RINs have dropped further to $1.07, and screen biodiesel crush margins, though slightly improved, remain around 50 cents per gallon negative through December. In today’s ARAG window, averages settled at $685/mt for FAME, $736.67/mt for RME, and $811/mt for UCOME. Flat prices were higher across the board, lifted by the spike in gasoil, while premiums for FAME and RME held up reasonably well despite BOGO slipping below +$440.

Energy markets are firming, with ICE gasoil at $706.50/mt, nearly 3% higher on the day. The Sep/Dec backwardation widened to +$31.75, reflecting tight near-term supply, while the heating oil crack once again climbed above $34/bbl, reinforcing refiners’ distillate profitability. Today’s gasoil spike is concerning, as geopolitical tensions could amplify the move further, adding a layer of volatility to already tight energy markets.

European logistics show modest recovery, with Rhine River navigation improving to 55–60% loading at Kaub and 70–90% at Duisburg, still shy of full capacity. The constraints will keep upward pressure on freight movement costs for rapeseed, biodiesel, and fuels. Taken together, China’s record vegetable oil stocks, U.S. biofuel weakness, and firm energy cracks define today’s market tone: energy is tight, crops are steady, but vegetable oils remain weighed down by oversupply.