Soybean Silence, Palm Turmoil, Gasoil Roars

A powerful move in energy markets today, with gasoil up 5.47% to $723/mt, a full standard deviation jump that should lend meaningful support to biodiesel and renewable diesel. The rally comes as geopolitical tensions recede slightly, but fuel supply chains remain tight.

In ARAG barges, physical biodiesel trading was firm but measured, with RME up over $30/mt and FAME 0 trading at +660 over ICE gasoil, a sharp rise reflecting stronger road fuel demand. UCOME lagged, with smaller price gains and visible resistance at current levels. This price behavior was consistent with broader trends: BOGO dropped sharply to +485, reflecting weakness in CBOT bean oil as soyoil futures paused after last week’s two-day limit-up rally.

D4 RINs dropped back to 1.227, as traders digested new Senate Finance Committee language that would bar stacking of 45Z with the SAF blender credit. Although the 45Z framework is not finalized, the optics of singling out SAF have introduced uncertainty. For now, RINs are recalibrating lower as optimism on federal incentives moderates. I am putting a few tables below to show how all the credits are shaping up in the Finance Committee, as it is in such a state of flux that it is difficult to comprehend sometimes.

On the feedstock side, pressure is mounting. Paranaguá FOB soyoil premiums fell sharply, quoted at -750 for July and -840 for August, while CFR China trade is nearly stalled. What’s most concerning is the collapse in U.S. soybean export activity: only 60 soybean cargoes have been sold out of the U.S. so far this June, compared to 268 at the same point last year. This isn’t a Brazil story — it’s a U.S.-specific issue, reflecting weak global demand, China’s stalling ahead of its July quota decision, and tightening domestic stocks due to bullish expectations around 45Z. NOPA data confirms the squeeze: soybean oil stocks are down over 20% y-o-y, as U.S. crushers prioritize domestic supply to capture policy-driven premiums.

Meanwhile in Asia, Malaysian palm oil futures surged to 4,093 MYR/mt, the highest since mid-April, buoyed by tighter production and strength in crude. But the feedstock narrative turned sharply political as Indonesia’s Attorney General seized $725 million from Wilmar Group, alleging corruption in export permit allocations. This development could disrupt flows from one of the world’s largest palm exporters, tightening the palm oil complex just as buyers across India and China re-enter the market. For now, traders must navigate a feedstock map shaped by fundamentals, policy, and geopolitics — all moving quickly.

Summary of current situation in Finance Committee

Credit Timeline