MethodologyContact usSupportLogin
On the US side, Chicago Mercantile Exchange soyoil futures and export bases have risen with the perception of demand for feedstocks outstripping supply due to higher mandates and to the understanding that the US will be exporting less soyoil but also importing more feedstocks, despite recent tariff action. In Argentina, soyoil bases have dropped recently, compensating for soaring CME futures and amid the pick-up in soybean harvest and sales and lackluster Indian demand for South American soyoil.
On June 1, the US-Argentina soyoil spread hit the highest point in Fastmarkets’ database, at 31.7 cents per lb, with the US basis for July loading in the Gulf ports assessed at a premium of 6.00 cents per lb to July CME soybean oil futures, while the Argentine basis for the same loading month in Up River ports was assessed at a discount of 25.7 cents per lb to the same futures contract. The spread between US Gulf and Brazil Paranaguá reached 31.5 cents per lb on the same day, also a record.
The spread between US Gulf and both South American countries remained high through mid-week and then receded to levels below 30 cents per lb on Friday. Fastmarkets’ soyoil price history dates back to 2018 for Brazil and Argentina and to 2003 for US Gulf.
Since the start of January, US soyoil futures have climbed by 50%, vaulting toward 80.00 cents per lb in early June. US premiums have followed in the same direction, with the need to meet higher mandates leading to growing demand from the biofuels industry. At the same time, South American bases have dropped to their deepest discounts to Chicago futures, cracking open the Argentina-to-US arbitrage opportunity.
“Every arbitrage window possible seems to be opening right now, including the potential for imported soybean oil from South America,” one US-based trading source said. “The word is, there are a lot of third-quarter imports being booked out now by coastal players.”
Back in the 2024/25 marketing year, US soyoil exports swelled to a record high just shy of 2.5 billion lb due to a combination of factors, such as the expiration of the US blender’s tax credit in December 2024, which made renewable diesel production economics less favorable and temporarily freed up volumes of soyoil for export.
However, soyoil sales and exports out of the US slowed in recent weeks due to increased price competition from Malaysian palm oil and South American soyoil. In the first two weeks of May, US soyoil exports slumped to new marketing-year lows, as domestic prices held above 70 cents per lb, cutting into their price competitiveness in the global market.
US soyoil exports started to position themselves out of the world market in March, when US cash and futures prices rallied amid a slate of bullish fundamentals. These factors included the Middle Eastern war-driven rally in crude and heating oil prices, but more importantly, tightening US supply amid expectations for increased soybean oil demand as a feedstock in US biofuels production.
At the end of March, the US Environmental Protection Agency released its second set of Renewable Volume Obligations (RVOs), highlighting a sharp increase in biomass-based diesel obligations for 2026 and 2027 compared with the agency’s initial proposal. Expressed in Renewable Identification Numbers (RINs), the RVO equates to a requirement of 5.4 billion gallons for 2026 and a mandate of 5.7 billion gallons for 2027 — a win for the US soybean oil market in terms of demand.
USDA data showed that through the week to May 28, US soyoil exports were down by 64% year on year, with accumulated shipments at 342,100 tonnes compared with 963,400 tonnes during the same week in the 2024/25 marketing year.
The USDA has projected that US soyoil exports will total about 1.2 billion lb at the end of 2025/26 and just 900 million lb in 2026/27. The massive export decline is tied to increased domestic demand from the biofuel sector, which will tighten the US share of the global soyoil market.
On the South American side, soyoil bases have been under pressure due to the expectation of a large crop, and that pressure increased in the past month amid the period with the largest availability of soybeans. The harvest is approaching its end, at 99.7% in Brazil and 96% in Argentina, according to government estimates from the two countries.
“The availability from Argentina is good and I wouldn’t be surprised if a few million tonnes were added to the total harvest at the end,” one market source in South America told Fastmarkets.
“There were some doubts at the beginning because of the rain and moisture levels, but the weather has improved and the harvest is already well advanced. It’s clear that the yields were very good,” they added.
The USDA expects the South American soybean crop, considering Brazil, Argentina and Paraguay, at 240.1 million tonnes in 2025/26, versus 233.81 million tonnes the previous season, with larger crops in Brazil and Paraguay largely offsetting a 6% lower production in Argentina at 48 million tonnes.
Besides the effect of the war in Iran and of higher US biofuel mandates in the US on futures being compensated by local bases, a pick-up in farmer sales of soybeans as harvest progressed in both Argentina and Brazil has contributed to push soyoil premiums even lower, another South American source said.
“I think the premiums here are weak and will continue to be until they hit US import parity if demand here doesn’t react,” a third market source in South America told Fastmarkets.
A biodiesel producer in Brazil told Fastmarkets there was a clear offsetting component from the rise in futures, but added the physical market in Brazil was also pressured by product availability after the harvest.
“On the demand side, recent biodiesel negotiations with lower-than-expected fees have cooled buying appetite [for soyoil] somewhat, reducing the need for hedging. In the end, CME futures rose faster than local physical fundamentals justified, and the adjustment ended up coming via basis,” they said.
Analysts across the Americas said soyoil markets in the US and South America are being pulled in opposite directions.
“The US has made itself a bit of an island for soyoil and other biomass-based diesel feedstocks by implementing import restrictions for 45Z eligibility, expanding the RVO and implementing tariffs on Argentine soyoil. The US domestic market is going to continue to be strong as crushers are running as hard as they can to produce enough soyoil to feed the RVO,” Fastmarkets’ agriculture and biofuels analytics leader David Alley said.
“Some imported feedstocks, such as Brazilian tallow, are starting to come into the US again, but not in enough quantities to offset the increases in total fats and oils demand,” he added.
Susan Stroud, analyst at No Bull Ag, told Fastmarkets that US soyoil has become “a runaway train” in the global vegetable oil market, “and policy is the conductor.”
“EPA’s record-large biomass-based diesel mandate has fundamentally changed the demand structure. Soyoil is no longer competing with palm oil and Argentine soyoil for export demand — it’s competing with canola oil, tallow, used cooking oil and other feedstocks for a share of a rapidly expanding biofuel market,” Stroud said.
“That’s why US premiums have blown out to record levels versus South America, and why higher D4 RIN values continue to support gains not only in soyoil, but across the broader feedstock complex,” she added.
Soyoil exports out of the US are “basically dead going forward, and Argentina will remain the key source for the product,” independent analyst Terry Reilly told Fastmarkets.
“As far as feedstock imports into the US, they should increase if a plant can justify the returns. It really comes down to a plant case by case basis for what product they use for biofuel production,” he said.
Javier Preciado Patiño, analyst at RIA Consultants, said it is no longer possible to view Chicago as a market that reflects a global supply and demand perspective.
“For some time now, Chicago has been responding primarily to internal US situations, such as news regarding the use of soyoil for biofuels. This isn’t necessarily something that will affect Argentina,” he said.
“The second point falls under the dynamics of the global oil market. Argentina is the world’s leading exporter of soyoil, competing with other vegetable oils like palm, sunflower and rapeseed. Any weakness in demand or an abundant supply expected in Argentina will affect the Argentine FOB price, which is the situation we’re seeing now,” he said.
Industry sources in South America, the US and even in India told Fastmarkets there was an arbitrage opportunity to send Argentine soyoil into coastal US even considering the current 19.1% import tariffs and even if the product were to be used to produce biofuels without a possibility to claim 45Z tax credits. Since the turn of the century, there have only been two years in which Argentina exported relevant amounts of soyoil into the US, with 47,264 tonnes shipped in 2004 and 43,500 tonnes in 2024.
For food usage, South American soyoil could face restrictions, one Brazil-based source said. Multi-ingredient meat and poultry products that use a US-origin label, such as “Product of USA” and “Made in the USA,” must be derived from animals born, raised, slaughtered and processed in the United States and have all other ingredients, except spices and flavorings, of domestic origin, according to US regulations.
Another factor that has weighed on South American bases is the slower pace of buying from major importer India this marketing year so far, although volumes are expected to pick up in coming months.
In the first six months of 2025/26, India’s soyoil imports have reached 2.29 million tonnes, a dip of nearly 310,000 tonnes from the same period a year ago, according to data from industry group SEA India, with some of the import share ceded back to palm oil.
India’s palm oil (CPO, RBD palm olein and CPKO) imports in the same period have totaled 3.97 million tonnes, nearly 1.2 million tonnes, or 45%, higher compared with the 2.74 million tonnes recorded in the same period a year ago.
Nonetheless, for May, India’s soyoil imports are expected to rise for a second straight month to around 450,000-500,000 tonnes from 360,350 tonnes in April, sources told Fastmarkets, while volumes going forward would depend on the spread between palm and soyoil.
“Palm is almost at parity with soyoil in forward prices, so we are expecting soyoil volumes to go up. Last year we had 5.3 million tonnes, and this year 4.8 million tonnes is possible,” Aashish Acharya, vice president at Patanjali Foods, a leading edible oils importer, told Fastmarkets.
Acharya projects that monthly soyoil import volumes during June-September could reach 480,000-520,000 tonnes.
Slower demand for soyoil so far this year is associated with soyoil being less competitive versus palm, but also with negative margins for the processing industry, which led to a more cautious approach toward new purchases, one market source in India told Fastmarkets.
“Also, demand was poor for South America with uncertainty in freight [due to surging fuel prices],” they added.
Soyoil from South America typically takes up the bulk of India’s soyoil imports, with volumes from Argentina and Brazil forming around 84% of imports in 2024/25.
Anilkumar Bagani, head of research at Sunvin, told Fastmarkets that, alongside the larger soybean production in South America exerting larger downward pressure on premiums, India also received more volumes of soyoil from China.
“The increased soybean crush at China has facilitated soyoil export to India, which limited the demand for South American soyoil a tad, and the lukewarm response for Argentina SME from Europe also pushed the South American soyoil basis down as well,” he told Fastmarkets.
Sources told Fastmarkets that at least 12,000 tonnes of Chinese soyoil were destined to Indian buyers in May from East Coast India port deliveries, besides other Chinese soyoil volumes bought by Nepal or diverted to the country.
Local oils have also been competitive versus imported ones, but that is likely to change soon as India enters its off-season before the new soybean harvest starts in September.
“Nearby local oil is under pressure, but once that settles down, then we may be in deficit during the July, August and September period as not many commitments have been made there and that will be festival season in India too,” another market source said.
Our soybean oil prices are market-reflective, assessing both the buy- and sell-side of transactions and are intended to be used as price references for negotiation and in physical spot and future contracts, as well as the settlement price of financial derivatives. Our price data is unbiased, verified and IOSCO-compliant.