Despite tight supply, basis levels on Gulf crude-degummed and central Illinois refined, bleached, and deoderized (RBD) soybean oil peeled a bit lower early this week amid signs of thinning demand. Consumption from the biodiesel and the renewable diesel sectors has dropped off because many producers have covered their positions through the fourth quarter and into the first quarter of 2024.

In addition, U.S. Renewable Identification Numbers (RINs) prices have eroded, as record production of biofuels outpaces federal mandates, deflating margins. Margins are so compressed that anecdotal reports have suggested U.S. producers may have shut down several facilities and/or cut production capacity at other plants.

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