SAF Joins the Crack Squeeze as ULSD Trades at 100% of WTI

Today’s market is less about crude flat price and more about the refined product barrel. WTI is still close to $69.80/bbl, but the ULSD screen crack is near $69.89/bbl, effectively 100% of WTI, while the US 3:2:1 crack is near $62.23/bbl, roughly 89% of WTI. I would not call this a confirmed all-time ratio record without a full historical ratio chart, but it is clearly historic extreme territory. That distinction matters. Crude looks contained, while gasoline and diesel screens are pricing scarcity. Add ICE gasoil Jul/Aug near +20 and Jul/Dec near +123.50, and the middle-distillate signal remains tight even as crude headlines lean toward restored Gulf flows and easier supply.

Heat Crack Margin

The US biofuel screen caught both sides of this move. Soybean oil sold off hard after USDA, with July at 67.10 cents/lb, down 2.85%, August at 66.51, down 3.41%, and December at 65.00, down 2.48%. BOPO is doing the adjustment work. CPO is still around $1,123/mt, while July soybean oil at 67.10 c/lb converts to roughly $1,479/mt. That leaves BOPO near $350/mt, down hard from the recent $500-550/mt zone but still high versus history. The US soybean oil premium to palm is correcting, yet it remains large enough to show that US policy and product cracks are still insulating CBOT from the global vegoil market.

BOPO

Biodiesel economics improved because heating oil moved the other way. The RD screen crush rose to 86.4 c/gal for September, up 33.8%, and 75.4 c/gal for December, up 31.5%. Conventional biodiesel screens were stronger, with September at 127.9 c/gal, up 18.1%, December at 115.9 c/gal, up 16.4%, and July near 138.6 c/gal, up 13.4%. D4 RINs remain the other pillar, with Dec26 at 2.442 and Dec27 at 2.480. Weak feedstock helps margins, but the real support is still policy plus product scarcity.

USDA gave soybean oil no help. Soybean planted acreage came in at 85.365 million acres, almost exactly the trade estimate of 85.369 million and above March intentions of 84.700 million. June 1 soybean stocks were 1.061 billion bushels versus the trade average of 1.046 billion and 1.008 billion last year. Corn acreage was 95.343 million acres versus 94.992 million expected, while corn stocks were 5.295 billion bushels versus 5.408 billion expected and 4.643 billion last year. Wheat acreage was lighter at 42.740 million acres versus 43.858 million expected, and wheat stocks were 0.920 billion bushels versus 0.934 billion expected. For biofuels, the soybean line matters most: acres were on trade and stocks were slightly heavy, so soybean oil was left to trade lower against a large recent long, weaker BOPO and stronger product cracks.

Palm added a mixed signal rather than a bearish one. Malaysia June palm oil exports rose 11.9% to 1.274 mmt from 1.139 mmt in May, with crude palm oil exports at 334,773 tonnes versus 210,963 tonnes in May. Indonesia lowered its July CPO reference price to $1,000.90/mt from $1,029.51/mt while keeping the export tax at $148/mt. CFR India still shows tight relative values, with CPO around $1,232.50/mt and soybean oil near $1,250/mt. The global vegoil message is therefore more nuanced than the CBOT screen alone. Palm is not collapsing, but soybean oil had to correct because the US premium had moved too far ahead of the broader vegoil complex.

Europe is trading the same contradiction. The AOM barge window printed three trades today, with FAME at 535, UCOME at 684 and RME at 575. The latest European table shows FAME around $1,465/mt, RME around $1,472/mt and UCOME around $1,610/mt, with HVO Class 2 near $2,700/mt and HEFA-SPK near $1,265/m3. The month-to-date numbers still show a large renewable fuel structure, with FAME at $1,462/mt, RME at $1,518/mt, UCOME at $1,606/mt and HVO Class 2 at $2,808/mt. The key point is not a single premium. Gasoil backwardation is rising, US clean product cracks are extreme versus WTI, and physical biodiesel markets are not behaving like soybean oil alone sets the value.

The most useful SAF chart from Bangkok Conference was the Argus graph showing global firm SAF and RD demand against firm capacity. It puts numbers around what feedstock traders already feel: SAF and RD are now in the same queue. Argus shows firm RD plus SAF demand around 45-50 mmt by 2030, while most operable capacity still relies on HEFA and therefore on fats, oils and greases. Asia looks well supplied for 2026, with China around 2.95 mmt/yr of operational SAF and HVO capacity and another 1.5 mmt/yr expected this year, but the longer-term issue is demand, certified feedstock and carbon-attribute ownership. SAF belongs in a biodiesel and RD recap because it is another claimant on UCO, tallow, palm, soybean oil and every certified low-CI molecule.

The bottom line today is clear: soybean oil broke, but biofuel economics did not. When the ULSD crack trades near 100% of WTI, the 3:2:1 crack trades near 90% of WTI, gasoil Jul/Dec sits above +120 and D4 RINs hold near 2.44, biodiesel and RD screens have a product-market reason to stay supported. SAF adds a second structural layer. Even if 2026 aviation supply looks comfortable in Asia, the 2030 RD plus SAF demand curve shows why feedstock markets should not treat today’s soybean oil selloff as the end of the story. Refined products are tight, policy value is high, and aviation is joining the same feedstock queue.