Heating oil posted the most significant move in the bio-based diesel complex this week. The Israel-Iran conflict appears to be de-escalating, with Iran delivering only a limited response specifically, a relatively minor retaliation against a U.S. airbase in Qatar. Traders sold on the news, interpreting the muted response as a sign that broader conflict risk is diminishing.
Bean oil attempted to rally but ultimately lost momentum, as broader energy market weakness dampened the response to bullish news out of Brazil. The country announced an increase in its biodiesel blend mandate from 14% to 15%, effective August 1. While the change may seem modest at first glance, Brazil’s substantial diesel consumption means this adjustment represents a significant uptick in demand for bio-based feedstocks. The mandate has been under discussion for some time and faced multiple delays, so its swift implementation is a welcome development for the market.
Renewable Identification Numbers (RINs) settled around the $1.14 mark. The EPA’s guidance accompanying the Renewable Volume Obligation (RVO) indicates that Small Refinery Exemptions (SREs) for 2026 and 2027 will be reallocated to obligated parties. While the overall policy tone is bullish, the uncertainty introduced by SREs has tempered price action. A finalized RVO will be key to unlocking further upside in RINs & bean oil.
Looking Ahead
Weather forecasts remain favorable, and crop conditions are strong. It’s been an unusually bearish June across the commodity complex, with little weather-related risk premium priced in. Monday’s USDA Acreage Report will be closely watched for any surprises that could shift sentiment.
The favorable RVO has done most of the heavy lifting, pushing us well down the field. But to score the touchdown, we still need to finalize the RVO, clarify the role of 45Z, and resolve uncertainties around Small Refinery Exemptions (SREs). Until those pieces fall into place, we’re still just short of the goal line.
- Dates to Watch
- Monday, June 30, USDA Acreage report
- Monday, June 30, EIA Feedstock Report
- Friday, August 8, 2025: RVO Comment Period Close
StoneX Biodiesel Board Crush
StoneX BBC opened at $0.53 last Friday but dropped sharply following the decline in heating oil, ultimately settling at $0.41. Bean oil also moved lower moved lower but heating oil offset this move on Friday closing at $0.41
Chart Data through Thursday 6/26
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