-KANSAS CITY, MISSOURI, US — CME Group soybean oil futures tumbled daily limit levels in the overnight markets May 15 (that began trading the evening of May 14) on reports the US Environmental Protection Agency (EPA) sent to the White House a proposed rule for Renewable Volume Obligations (RVOs) beginning in 2026 that was well below industry recommendations.
Soybean oil contracts sustained their limit down status of 300 basis points (3¢ per pound) during the May 15 daytime session, with spillover pressure pushing soybean futures near their limit down levels as well.
While an official statement about the proposal has not been released, rumors swirled that the anticipated RVO number was around 4.65 billion gallons despite prior indications that the EPA was leaning toward the recommended 5.25 billion gallons.
Earlier this year, President Donald Trump directed industry leaders from “big oil” and “big ag” sectors to form an alliance to determine mutually beneficial RVOs. After several meetings, the group put forth recommendations that were about 57% higher than current standards set by the the previous administration of President Joe Biden at 3.35 billion gallons a year.
The formation of the group along with their recommendation provided a shot of adrenaline to a market that had been floundering on ideas that the “non-green” Trump administration might sustain or even diminish the biofuel policies from the prior administration that already were viewed by many as unreflective of an industry that had amplified capacity to meet robust market demand.
In April, the July soybean oil contract jumped 19% from the 2025 low set in March. Before the sharp overnight reversal, the contract soared to 52.32¢ a pound on May 14, its highest level since October 2023, and closed at 49.32¢ a pound on May 15.
Still, industry participants remained hopeful with some saying the rumors had no substance to support it.
“Nobody for sure knows what the EPA has sent to the Office of Management and Budget and the other agencies that review the rule before it is released, so this was just speculation, and we firmly believe that the speculation is false,” said Paul Winters, director of public affairs for Clean Fuels Alliance America.
Winters said the industry was lockstep in its agreement on what the right number for the biomass-based diesel volumes should be, based on data showing how much fuel was already being produced and how much feedstock was available to support that production.
“I find it hard to imagine that the EPA will come out with a number that is different from what everyone else, including other federal agencies like the Energy Information Administration, has come up with,” he said.
An official announcement from the EPA on the actual number is expected in the coming days.
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