Cash basis levels on US interior crude-degummed and refined, bleached, and deodorized (RBD) soybean oil were mostly firm on Tuesday July 16. 

“It appears things are a little tight at the moment. A lot of [soy] oil was consumed into the biofuels [sector] when soy oil [futures] broke lower and competing feedstocks firmed,” one market trading source said.

Soybean oil prices have been in recovery mode after they plunged to multi-year lows earlier this year that resulted from a massive build-up in supply caused by slower-than-expected demand from the US biofuels sector.

In the last several weeks, soybean oil futures prices started to solidly advance amid forecasts for hot weather in the US Midwest crop-growing region and worries of a trade war between China and the world’s top palm oil producer Indonesia. A disruption in palm oil exports to China could effectively boost soybean oil demand.

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