Soy oil prices declining thanks to drops in U.S. government biodiesel mandates

In Washington, D.C., soy oil prices are declining after the U.S. government proposed drops in biodiesel mandates for 2018 and 2019. Downward pressure on soy oil prices is expected and possible canola as well due to the lower biodiesel mandate.

“It’s certainly getting the trade’s attention here, especially after the market had been feeling that we’d be doing nothing but increasing (mandate) amounts in the coming years,” Rich Nelson, chief strategist with Allendale Inc. told Producer. Nelson is positive about the longer-term outlook for soy prices because of biodiesel expansion in other countries like India.

Jeff Coglianese, senior broker with Daniels Trading, told Producer “I don’t know if it’s going to have a huge impact on soybean prices. All you need is a little bit of demand from China and you kind of eat that up pretty quick,” he said. “It could have some effect, but I don’t think it will be a major impact.”