Basis on refined, bleached, and deoderized (RBD) soybean oil in Illinois climbed again this past week, driven higher by strong non-biofuel domestic demand and tight supply. Anecdotal reports continued to suggest that capacity is generally sold out through the third quarter. “The market is getting squeezed tight in the nearby. It’s hand to mouth right now,” a trading source told The Jacobsen.

The gains in the cash market have been outpacing a recovery in bean oil futures due to expectations for increased demand from the U.S. renewable diesel (RD) sector as new units come online. Other sources pointed to the possible announcement of an RVO increase from the U.S. EPA by the middle of June. The agency has until June 14 to update RFS mandate levels. Reports that a proposal to include the electric vehicle industry in the federal biofuel blending program will be scrapped would open up more RINs for RD or biodiesel production. 

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