Cash basis on Illinois and Gulf Coast crude-degummed soybean oil moved 50 basis points higher this week following a period of relative stability. Interior soybean oil supply has been tight and demand from the non-biofuel sector has been firm amid forecasts for lingering dry and hot weather across much of the Midwest Corn Belt. Cargill’s decision to suspend construction plans on a Mississippi soybean processing plant has also been contributing to the market’s bullishness.

The refining margin, or spread, between crude-degummed and refined, bleached, and deodorized (RBD) soybean oil in Illinois was pegged at about 12-12.5 cents, contracting from 13 cents last week. The recent strength in RBD basis has been linked to expectations for increased demand from the U.S. renewable diesel (RD) sector. RBD soybean oil is the preferred feedstock for many U.S. producers, particularly ones that do not have pre-treatment facilities on site at their RD…