May 18

5/18 - In last week’s WASDE report, the USDA pegged 2026/27 soy-oil usage for biofuel at 17.8B pounds – 54.6% of total soy-oil production for the crop year. USDA also raised its 2025/26 projected soy-oil price from $.5900/lb to $.6300; and pegged 2026/27 at $.7000/lb. Soy-oil futures are being driven primarily by biofuel demand. On 4/1/26, the EPA published its final rule on Renewable Fuel Standards with biomass-based diesel mandated at 5.40B gallons for 2026 and 5.70B gallons for 2027. These are huge increases from the 3.35B gallons for 2025. Now, a war‑driven crude oil rally has tightened the correlation between energy and veg‑oils. Across veg‑oils, crude palm oil futures have rallied to multi‑month highs on Indonesian biodiesel policy and strong demand, preventing soybean oil from cheapening too much versus palm. Soy-oil futures have jumped over the past 3 months from $.57/lb to $.7366 (5/15).