1. Weekly News

United States

USDA Projects Rebound in Soybean Oil Biofuel Use but Global Supply Pressures May Limit Price Gains

The United States Department of Agriculture's (USDA) World Agricultural Supply and Demand Estimates (WASDE) latest May-25 report revised down its 2024/25 estimate for the United States (US) soybean oil use in biofuels to 13.1 billion pounds (lbs) but forecasts a rebound to 13.9 billion lbs in 2025/26. Despite lower projected US soybean production, higher crush demand is expected to lift soybean oil output and raise stocks by 6%. Soybean oil exports are forecast to decline due to growing global supplies of competing oils.

The 2025/26 US soybean oil price is projected at USD 0.46/lb, up slightly from the previous year, supported by rising biofuel demand and domestic crush. However, lower US exports and increased South American output, especially Brazil's record 175 million metric tons (mmt), may cap price gains. Global soybean oil market dynamics remain shaped by rising crush volumes and shifting trade flows amid softening US export competitiveness.

2. Weekly Pricing

Weekly Soybean Oil Pricing Important Exporters (USD/kg)

Yearly Change in Soybean Oil Pricing Important Exporters (W20 2024 to W20 2025) 

Argentina

In W20, Argentina's soybean oil prices increased to USD 1.04 per kilogram (kg), marking a 5.05% week-on-week (WoW) rise and an 18.18% increase year-on-year (YoY) from USD 0.88/kg. This price growth comes amid mounting pressure on processing margins following the reinstatement of the 31% export tax on soybean oil and meal. While temporarily reduced withholdings previously offered neutral to slightly positive margins, the return to full rates has driven margins into negative territory by approximately USD 35 per metric ton (mt). The theoretical purchase price for crushers is estimated at USD 245/mt, compared to a current market price of USD 280/mt. Market direction depends on whether the government extends the temporary tax cut beyond June 30. Without an extension, negative margins may curb crushing and tighten supply, supporting prices.

Brazil

Brazil's soybean oil prices rose to USD 1.18/kg in W20, an increase of 3.51% WoW and a 24.21% YoY rise from USD 0.95/kg. The price increase reflects both strong domestic demand and growing global market momentum. Brazil's soybean production is forecast to reach a record 175 mmt in 2025/26, supporting higher crushing volumes and positioning Brazil as a key driver of global soybean oil supply. As global crush expands and exports from South America rise, increased availability could temper future price gains despite current strength. Higher stocks and production may limit upward price pressure in the medium term, though near-term prices could remain firm on demand for soybean oil and meal, particularly from Asia.

United States

US soybean oil prices rose to USD 1.10/kg in W20, reflecting a 3.77% WoW increase and a 13.40% gain YoY from USD 0.97/kg. This price level aligns with a broader upward trend that peaked with a 25% surge over the past two months, driven by speculation surrounding a proposed US bill to raise biofuel blending mandates to 5.5 billion gallons by 2031.

However, the rally has shown signs of weakening. Reports that the 2026 renewable diesel target may be significantly lower than expected due to opposition from the current US administration led to a 6% decline in Jul-25 soybean oil futures, now at USD 1,088/mt. Despite the pullback, current futures remain 17.6% higher than two months ago, indicating elevated price levels but with potential downside. External pressures are also emerging. While US-China tariff easing initially supported prices, Brazil’s price competitiveness continues to limit American export prospects. In parallel, progress in US–Iran negotiations is weighing on crude oil prices, reducing biofuel margins and further pressuring soybean oil.

Netherlands

Soybean oil prices in the Netherlands rose to USD 1.20/kg in W20, up 0.84% WoW and 22.45% YoY. The increase reflects firm export demand, particularly from the United Kingdom (UK), where consumption is projected to continue expanding through 2035. The Netherlands remains the dominant supplier of soybean oil to the UK, accounting for 80% of total imports in volume and 79% in value in 2024. Sustained export growth, averaging 5.3% annually since 2013, supports stable pricing fundamentals.

Spain

Spain's soybean oil prices declined to USD 1.40/kg in W20, marking a 0.71% decrease in both WoW and MoM. The modest decline reflects subdued domestic demand and limited export competitiveness. Spain's share of UK soybean oil imports remains marginal at 4.5% by volume in 2024, significantly trailing the Netherlands and Germany. Additionally, Spain's average annual import growth rate to the UK has been negative since 2013, both in volume (-2.2%) and value (-1.7%), signaling weakening trade performance. Absent stronger domestic demand or improved export dynamics, Spain's soybean oil prices may remain under mild downward pressure. However, any recovery in regional demand or shifts in EU trade flows could provide moderate price support in the medium term.

3. Actionable Recommendations

Strengthen Market Position Through Strategic Export Diversification

With US soybean oil exports facing pressure from increased South American output and declining global competitiveness, exporters should explore alternative and emerging markets in Asia and Africa. Targeting regions with growing demand for soybean oil and meal, particularly where Brazil has not yet gained a dominant market share, can help stabilize export revenues and reduce reliance on traditional destinations affected by tariff or trade uncertainties.

Implement Flexible Procurement and Hedging Strategies

Given rising crush volumes and projected stock growth in the US, combined with policy-related price volatility, processors and traders should adopt dynamic procurement strategies. Leveraging futures and options markets to hedge against short-term price swings, especially amid biofuel mandate uncertainty, can help manage cost risks and maintain margins. Strategic buying during periods of price softness, particularly in Q3-2025, could optimize input costs ahead of the projected 2025/26 rebound.

Monitor South American Tax and Policy Shifts for Supply Risk Management

With Argentina’s reinstated export tax driving negative crushing margins and potential supply tightening, importers should closely monitor any changes in tax policy beyond June 30. A reduction or continuation of the full 31% tax could significantly influence Argentina’s export volumes and regional price dynamics. Diversifying sourcing between Argentina and Brazil, or increasing forward contracts, will help mitigate potential disruptions linked to policy-driven supply constraints.

Sources: Tridge, Ukr AgroConsult, La Voz