Market Update: Soybean Oil Prices Surge Post Treasury Announcement

Date: 9:38 a.m. CT

Current Market Snapshot

As of 9:07 a.m. CT, the agricultural market has seen fluctuations with March corn up by 2¢ at $4.27¾ per bushel. March soybeans also experienced a rise, increasing by 8¢ to $10.68¼ per bushel.

For wheat, the March CBOT variety is currently priced at $5.29¾ per bushel, up 2¢. Kansas City wheat has seen minimal movement, up less than a penny at $5.35½ per bushel. However, March Minneapolis wheat has dropped by 1½¢, currently valued at $5.70 per bushel.

Treasury Department’s Proposed Guidance Impact

In a significant development, the U.S. Treasury Department has released proposed guidance for the 45Z Clean Fuel Production Credit. This announcement has evidently influenced soybean oil prices, as noted by Arlan Suderman, chief commodities economist at StoneX:

“Soybean oil prices surged overnight following rumors of forthcoming guidelines from the Treasury regarding the biofuel program. Once released, it was apparent that the document retains the removal of the indirect land use charge from the carbon intensity score formula, causing a 30¢ spike in value for soybean oil related to renewable diesel and biodiesel production.”

Suderman pointed out that North American feedstocks have been given priority, while used cooking oil from outside of North America will be disqualified starting in 2026.

Future Guidelines and Market Expectations

Further changes are anticipated as the RVO (Renewable Volume Obligation) blending guidelines are yet to be fully determined. Suderman emphasized that these will influence the final EPA guidelines expected in late February or early March, depending on the current government shutdown’s duration.

“Even though uncertainty prevails, we believe the White House aims to support agriculture through the biofuel program,” he added. “We expect to see guidelines that could notably bolster demand for feedstocks.”

Livestock Market Overview

Shifting focus to the livestock sector, as of 9:07 a.m. CT, March feeder cattle have declined by $1.03 to $365.33 per hundredweight (cwt). Meanwhile, April live cattle fell by $1 to $238.53 per cwt, and April lean hogs decreased by 3¢, now priced at $96.60 per cwt.

Other Market Trends

On the energy front, March crude oil has risen by 53¢, reaching $62.67 per barrel. In currency markets, the U.S. Dollar Index has dipped to 97.42.

Additionally, stock market indices reflect mixed trends, with the S&P 500 Index down by 30.20 points while the Dow Jones Industrial Average has shown a slight increase of 29.09 points.

Conclusion

Overall, the agricultural market is experiencing significant changes influenced by government policy and seasonal factors. Stakeholders will need to stay vigilant as new guidelines emerge and market conditions evolve.