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Basis indications for US interior and Gulf crude-degummed soybean oil were unchanged day on day but firmer week on week during the Monday, February 24 session.
The basis on nearby Gulf crude-degummed soybean oil was assessed at a premium of 200-400 basis points per lb to March soybean oil futures on the Chicago Mercantile Exchange, unchanged from the Friday, February 21 assessment.
Some market sources called the Gulf soybean oil market tight and said fuel buyers were at the lower end of the range, while buyers in the export market were at the higher end of the range — which was up from a premium of 300 basis point per lb to March soybean oil futures a week earlier.
Soybean oil is one of the most widely used feedstocks in the production of biomass-based diesel and renewable diesel, but in the absence of guidance on the 45Z Clean Fuel Production Credit (CFPC) until earlier this year, biofuel producers were unable to forecast production and feedstock needs into early 2025 and stepped back from the buy side of the market.
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US producers started to scale back and even halt their feedstock purchases amid uncertainty related to the transition from the US Blenders’ Tax Credit (BTC) to 45Z.
Many of the US’ stand-alone biodiesel plant operators temporarily idled production due to poor margins in January, Fastmarkets has been told repeatedly by market sources in recent weeks.
Monthly data released by the US Energy Information Administration on Friday showed a decline in renewable diesel supply to 215.7 million gallons in January. This was down by 37.5% from the 2024 monthly average of 296.5 million gallons.
Domestic supply made up the entirety of renewable diesel supply in January, as the Environmental Protection Agency (EPA) reported no imports generated renewable identification numbers (RINs) in January. The last time the US saw no renewable diesel imports was in February 2012.
The decrease in imports can be attributed to the replacement of the BTC with 45Z since the latter does not provide tax benefits for imported biofuels.