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Key takeaways:
The US animal fats and oils markets continued on a relatively slow but mixed note on Tuesday August 26, with participants still weighing the implications of the EPA’s recent Small Refinery Exemption (SRE) ruling heading into the fourth quarter.
Fastmarkets assessed tallow, max 20% ffa, delivered US Gulf slightly lower from Monday August 25 at 60.5–61.5 cents per lb based on trades reported within that range.
Meanwhile, used cooking oil, delivered US Gulf was assessed half a cent higher on Tuesday, compared to Monday, at 62.5 cents per lb, with bids at that level and offers as high as 65.25 cents per lb.Inland, choice white grease, fob Missouri River edged higher from the previous day in a wider 59–61 cent per lb range.The day’s modest gains contrasted with softer moves in related markets. September soybean oil futures fell 1.55 cents, or 2.85%, to 52.76 cents per lb, while heating oil futures dropped by 2.75% to $2.28 per gal.
Distiller’s corn oil, fob IL/WI followed those markets lower, assessed at 61–63 cents per lb on Tuesday, down from 63–64 cents per lb on Monday. Distiller’s corn oil, fob Mo. River was assessed at 60–61 cents per lb, down from 62–64 cents per lb on the day before.The mixed movements seen throughout the day reflected the broader uncertainty in the current market landscape. Market participants pointed to the SRE ruling on Friday August 22, which many describe as generally supportive for RINs but not enough to meaningfully shift near-term demand.
“SRE clearly was a good case scenario, not the worst case, and it can get better if the reallocation occurs,” one source said.
Poor renewable diesel margins and reduced plant run rates continue to limit feedstock pull, while cheaper corn out of harvest is encouraging some feed buyers to scale back fats in rations.
“In the nearby 30–45 days it definitely feels weaker, with oleo and feed also looking fatigued,” the same source said.
Vegetable oil dynamics are adding pressure to the scenario, according to market participants. Palm oil developments, including Indonesia’s potential tariff exemption into the US, could cap tallow values if palm begins competing into feed markets.
Canola oil is also under pressure after China imposed steep duties on Canadian seed, with crushers running harder and pushing more oil toward US demand channels. Alongside the ongoing weakness in soybean oil, these factors continue to weigh on the broader fats and oils complex.
US animal fats and oils markets remain stable with only incremental movements occurring in either direction, with participants closely watching for further policy developments, including potential reallocation to final RVO volumes, for clearer direction into the fourth quarter.
Outside the US, the European market continued moving in the uptrend on Tuesday, with sources reporting UCO price indications in the range of $1,140-1,165 per tonne in the CIF Amsterdam, Rotterdam, Antwerp (ARA) market.
Fastmarkets revised its daily used cooking oil, cif ARA assessment up by $10 per tonne from its Friday value to $1,150 per tonne.The inland market in Europe also moved in the same direction, with bids climbing up to €1,090-1,100 ($1,268.81-1,280.46) per tonne DDP North-West Europe, while offers were quoted in the range of €1,110-1,125 per tonne DDP.
Fastmarkets assessed its used cooking oil, ISCC, ddp Northwest Europe at €1,105 per tonne, up by €40 per tonne from Friday.
Sources told Fastmarkets that, unlike what had been observed in recent weeks, demand from the biodiesel sector was no longer the main factor behind the spike in prices. Suppliers were reportedly speculating, withholding their product and testing the upper limit.
Fastmarkets assessed the price for bleachable fancy tallow, max 3.5% ffa, cif Sao Paulo at 7.10-7.40 Reais ($1.31-1.37) per kilogram on Thursday, up by 5.07% from 6.75-7.05 Reais per kg a week earlier.
Meanwhile, the main reference for Brazil’s biodiesel sector, bleachable fancy tallow, max 5% ffa, cif Sao Paulo was assessed at 6.95-7.15 Reais per kg on Thursday, up from 6.60-6.80 Reais per kg a week earlier.
The previous highest price was on March 20, 2025, when the BFT max 3.5% ffa was assessed at 7.05-7.30 Reais per kg, while the BFT max 5% ffa was at 6.65-6.75 Reais per kg. At the time, strong export flow supported prices.
Market participants are now assessing whether this upward movement is sustainable, considering there are no expected tallow exports from Brazil in September.
Sources told Fastmarkets that the August export total, which will be released by Brazilian customs next week, could be around 70,000 tonnes.
With the volume being potentially redirected to the domestic market, traders believe that supply pressure should push prices down, “but not too much, since soybean oil is appreciating,” a source said. Soyoil is the main driver of tallow prices in Brazil’s domestic market, as its the most used feedstock for biodiesel production.
“Just as prices are accelerating, there’s concern about a lack of support in September due to the absence of exports. Imagine what’s going through the seller’s mind seeing these levels – thinking it could go even higher, but also fearing a reversal,” a second source said.
“I feel like no one is buying. The market is stagnant, with suppliers pushing this rally too hard,” a third source said.
Fastmarkets assessed the export price for tallow, max 15% ffa, fob Santos at $1,040-1,080 per tonne on Thursday, unchanged week on week.
Both sides of the market remain far apart. US buyers continue to monitor their domestic prices and, according to one source, “the math doesn’t add up” for importing Brazilian tallow amid the tariffs.
Meanwhile, Brazilian exporters say they are avoiding even filling their tanks at the ports, since they don’t know when – or in what specification – they’ll be able to sell. Likewise, importers don’t seem willing to match Brazilian domestic market prices.
“In September, we’ll see if the US market really has power over the South American”, an exporter said.
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