Soybean Market Soars on Biofuel Demand Surge, Diverging Oil and Meal Trends

So far in 2025, the soybean market has taken center stage in commodities, with soybean oil leading the pack—surging over 30% year-to-date and outstripping the likes of gold, silver, and copper. This exceptional performance is intimately tied to bullish developments in US biofuel policy, especially the Environmental Protection Agency’s (EPA) newly proposed Renewable Fuel Standard (RFS) targets for 2026 and 2027. These will notably increase demand for biomass-based diesel, driving expectations that soybean oil use in US biofuel pools will sharply increase. Concurrently, legislation like the ‘One Big Beautiful Bill Act’ ensures any clean fuel production credits can only be claimed using feedstocks sourced from North America, further locking in demand for US-grown soybeans.

However, this bullish narrative for oil contrasts sharply with the bearish sentiment weighing on soybean meal. Soybean meal prices have dropped almost 14% since January 2025, pressured by China’s new policies to reduce soymeal usage in animal feed and global expectations for ample soybean supplies. Abundant 2024/25 crops have been capped by a 5.2% y-o-y production increase, and while 2025/26 output is forecasted to contract by just over 1%, the production balance is expected to widen substantially, cushioning stock levels.

For market participants, this divergence underscores the growing importance of monitoring biofuel policy, speculative positioning in oil versus meal contracts, and ongoing supply shifts in the Americas and China. With weather conditions and crop acreage in focus through the upcoming months, the path forward for soybean prices will be shaped not just by supply— but by the energy transition’s accelerating impact on agricultural markets.

📈 Prices & Market Sentiment

Product	Exchange/Market	Latest Price	Weekly Change	Market Sentiment
Soybean Oil (Aug futures)	CBOT	54.55 US¢/lb	+11.8% MoM	Bullish
Soybean Meal (2nd Month)	CBOT	275.8 US¢/bushel	-8.1% MoM	Bearish
Soybeans (FOB US)	Physical	€0.35/kg	0% WoW	Neutral
Soybeans (FOB IN)	Physical	€0.73/kg	0% WoW	Neutral
Soybeans (FOB UA)	Physical	€0.34/kg	0% WoW	Neutral
Soybeans, organic (FOB CN)	Physical	€0.75/kg	-1.3% WoW	Weakening
Soybeans, conv. (FOB CN)	Physical	€0.67/kg	-1.5% WoW	Weakening
Degummed Soybean Oil (India, landed)	SEA Mumbai	$1,180/t	+11.9% YoY	Bullish
Soybean Meal (export)	India FOB	$390/t	-20.2% YoY	Bearish

🌍 Supply & Demand Drivers

• EPA Renewable Fuel Standard: New US targets for biomass-based diesel for 2026/27 are well above industry proposals, forecasting a 250 million gallon/year increase in soybean oil use for biofuels.
• Legislative Support: The “One Big Beautiful Bill Act” restricts US clean fuel credits to North American feedstocks, safeguarding domestic demand.
• Chinese Feed Policy: China targets reducing soymeal content in animal feed from 13% to 10% by 2030, pressuring demand for soymeal.
• Global Supply: 2024/25 production up 5.2%, but 2025/26 expected to contract marginally by 1.01%. Production balance rising to 5.2 Mt in 25/26 vs. 4.2 Mt in 24/25.
• Speculation: US soybean oil led commodities in 2025, second only to cobalt, due to policy (not weather or supply shocks). Managed money has increased exposure in oil contracts.

📊 Fundamentals & Global Balances

Country	2024/25 Prod. (Mt)	2025/26 Est. (Mt)	Year-on-Year Change (%)	Stock (End-25/26, Mt)
USA	114.5	113.0	-1.3%	8.2
Brazil	156.5	155.1	-0.9%	34.7
Argentina	37.6	36.8	-2.1%	5.5
China	20.7	20.1	-2.9%	18.6
India	11.6	11.1	-4.3%	1.7
World	394.5	390.0	-1.1%	74.8

☀️ Weather Outlook & Yield Watch

• US Midwest: Currently favorable soil moisture; NOAA forecasts indicate moderate temperatures and scattered rainfall through the week. No immediate heat risks. Short-term boost to pod setting.
• Brazil (Mato Grosso): Rainfall slightly above seasonal norms; late planting may see localized excess moisture risks but benefits pod filling.
• Argentina: Mild winter with timely rains over core Pampas region; expectations for trend yields if July/August remain temperate.
• China: Variable; North China Plains experiencing patchy dryness, but forecasted rain next week reduces immediate stress.

📌 Market Outlook & Recommendations

• Soybean oil markets likely to remain well-supported through Q3 2025 due to EPA biofuel mandates and rising crude oil prices.
• Meal prices under further pressure on weak Chinese demand and rising global production balances. Spread trading opportunity: long oil/short meal.
• US domestic soybeans should benefit from North America-centric policy. Upside for cash prices into US harvest if oil strength persists.
• Physical premiums remain narrow outside specialty/organic grades; watch for volatility if weather worsens later in key US regions.
• For producers: Consider selling into strength in oil; for end-users: secure forward meal coverage as downside risk for beans is moderate but rising if Chinese demand weakens further.

📆 3-Day Regional Price Forecast

Market	Current Price	3-Day Forecast	Market Bias
CBOT Soybeans (Nov Futures)	c. $9.38/bu	$9.30–$9.50/bu	Firm/Bullish
FOB US (EUR)	€0.35/kg	€0.35–0.37/kg	Steady/Bullish
FOB Ukraine (EUR)	€0.34/kg	€0.34–0.35/kg	Neutral