Biofuel boost drives soybean price jump

June 19, 2025 | Kriss Nelson

Soybean futures saw a solid rally following the Environmental Protection Agency’s announcement of expanded biofuel blending mandates under the Renewable Fuel Standard (RFS).

The markets responded instantly after the report, rallying more than 25 cents per bushel in soybean futures.

“This rally stems from the announcement of increased soybean oil use for biodiesel, which is positive for the soybean industry’s short- and long-term prospects,” says Al Kluis, managing director of Kluis Commodity Advisors.

Weather factor

Typically, June rallies in the commodity market are driven by weather, and despite the RFS announcement, weather remains a significant issue.

U.S. Department of Agriculture’s (USDA) National Agriculture Statistics Service’s (NASS) weekly crop progress report released on Monday estimated that 66% of soybeans were in good-to-excellent condition, down 2 points from last week.

“We are looking at the potential of drier conditions, and that is a real concern for soybean crop conditions,” says Kluis. “USDA has projections of 52.5 bushels to the acre, and I think that is a long shot. Because of that, I think there is some optimism on new-crop prices.”

The timing is pretty good for the recent rally in soybean prices, he says.

“By this time of year, I would like to have 80 to 90 percent of my crops sold,” says Kluis. “I do not like storing soybeans past July 10. So, when we’re having this nice rally up to around $10.80 on the July futures, and I am the seller, although it is not a real profitable level, it is sure a lot better than selling at $9.80.”

June WASDE report

The USDA’s June World Agricultural Supply and Demand Estimates (WASDE) projections left U.S. 2025-26 soybean supply, use and prices unchanged.

The U.S. season-average soybean price is forecast at $10.25 per bushel; soybean meal and oil prices are projected at $310 per short ton and 46 cents per pound, respectively.

The global numbers, Kluis says, stood out in the otherwise non-eventful report.

Global soybean supply and demand forecasts for 2025-26 include higher beginning stocks, unchanged production, slightly higher crush and higher ending stocks.

Beginning stocks were raised by 1 million tons to crush for China in the prior marketing year, guided by the slower-than-expected reported weekly pace to date. Crush for 2025-26 is projected to rise by 100,000 metric tons due to higher use by Pakistan, South Africa and the United Kingdom.

With exports unchanged, global ending stocks are increased by 1 million tons to 125.3 million, primarily because of higher stocks for China. Another notable revision is the increase in palm oil production for Malaysia for 2024-25 and 2025-26, based on an expected recovery following widespread flooding that impacted operations earlier in the year.

“We are continuing to see soybean usage stay very strong,” says Kluis. “We have some competition out of Brazil, but a lot of their large crop has already been priced into the markets.”

The market is currently watching the weather, he says.

“Are we going to get this dome of hot weather in early July? How hot and how long?,” says Kluis.

Market volatility is anticipated with weather concerns, given the continuing Israel-Iran conflict. If tensions escalate, crude oil prices could spike.

In the short term, Kluis says higher oil prices might help boost demand for biodiesel and ethanol, which could support corn and soybean prices.

The result could be that most commodities are consumed as fuel, and high energy costs may decrease consumer confidence over the long term, potentially reducing consumer spending.

“This volatility increases the need to stay in good cash position, discipline and to be selling crops as prices rally,” he says.

A special invitation

Farmers are invited to join in a special subscribers-only webinar on June 30 at 10:45 a.m.

The session will cover USDA’s annual acreage and quarterly grain stocks report. The link to the webinar can be found at https://www.goto.com/webinar/join. You will be asked to submit the webinar ID of 470-196-075 and your email using the password “Summer.”

Written by Kriss Nelson

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