Good morning. This Monday, June 22, you're probably wondering why the soybean market isn't falling out of bed today.
While there were no export sales announcements to China, we did receive some important news late Thursday after the markets closed for the weekend. The EPA reported that May RIN generation totaled 736 million D4 RINs, which was not enough to meet requirements. Current production is running at only 76% of what would be needed to satisfy the Renewable Volume Obligation (RVO) mandates.
That news is providing strength to the soybean oil market today and could help support prices heading into the June 30 Acreage and Stocks Report.
Right now, this market isn't being driven by crude oil valuations. Instead, it's about the demand for soybean oil in renewable fuel production. Soybean oil remains more valuable than used cooking oil, which continues to support the market.
The July soybean oil contract is trading near 70 cents while the cash market is closer to 67 cents, meaning futures are currently at a premium. With little expectation for deliveries at month-end, soybean oil may be poised for a recovery from the lows established last Thursday.
Bottom line: soybean oil remains on solid footing despite the recent decline in crude oil prices.
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