February insights: Animal fats market trends, soybean oil demand and policy developments
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Welcome to the February 2025 edition of Fastmarkets Agriculture Digest. We are excited to bring you your monthly overview of critical agriculture market updates and industry insights. Each month, we delve into the key markets, such as grains and oilseeds, veg oils and meals, biofuels, sustainable aviation fuel (SAF) and feedstocks, and animal fats, oils and proteins.
In this edition, we take a deep dive into the latest price rises in the animal fats market, exploring the key factors driving this trend and its implications for the agriculture industry. As we move further into 2025, we examine soybean oil demand, considering export dynamics, domestic consumption and policy developments shaping the market in the coming months.
What you will find inside:
Premium tallow and lard prices increase, aligning with broader fats market trends
Prices for premium-grade tallow increased on Friday, February 14, with ten railcars of technical tallow trading at 56 cents per lb Chicago and ten railcars of edible tallow at 57.5 cents per lb, closing the week on a firm note. Lard also gained, with one railcar trading higher at 52 cents per lb Chicago.
This increase was largely expected, following earlier strength in the renderer bleachable fancy tallow (BFT) market this week, which helped support higher Gulf?tallow prices.
By Friday, renderer-grade BFT finished 2.07% higher on the week, while Gulf tallow rose 1.36% from last Friday’s average.
Throughout the week, while market sentiment remained somewhat varied, most participants pointed to strong demand continuing to outweigh available supply, keeping conditions tight.
Others pointed to rising prices for imported material into the West Coast and Gulf — driven by increased interest in tallow imports as imported used cooking oil (UCO) is no longer eligible under 45Z — as additional factors supporting the market.
Elsewhere, after a somewhat directionless week, the nearby?soybean oil market?was up by 0.48% compared with last week’s average, which helped support higher distiller’s corn oil (DCO) and?UCO prices?throughout the week.
How are these increases impacting the biodiesel and renewable diesel markets? Learn more in our outlook by Sarah Schneider.
Brazil’s tallow prices higher despite halt in biodiesel blend increase
Brazilian?tallow prices?rose further in the week to Thursday, February 20, mainly supported by stronger exports. Suppliers kept their offers at higher levels despite unexpected changes in the country’s biodiesel mandate.
The price reference for exported Brazilian tallow with a maximum of 15% free fatty acids (FFA), FOB Santos, was assessed at $1,050-1,080 per tonne in the week, up by $20 per tonne week on week.
Market participants said they heard trades at as high as $1,100 per tonne, while US buyers confirmed a growing demand for Brazilian tallow for March and April deliveries.
FOB Santos tallow remained competitive compared to rising US domestic?animal fat prices. The price for tallow, max 20% FFA, delivered US Gulf was assessed at 55 cents per lb ($1,210 per tonne) on Wednesday, February 19.
In the domestic market, the BFT, max 5% FFA CIF S?o Paulo, inclusive of 12% tax — a main reference for the local biodiesel industry — was assessed at 6.20-6.30 Reais ($1.08-1.10) per kg, up by 0.05 Reais per kg from a week earlier.
Demand rises are expected for March and April, with trades reportedly reaching $1,100 per tonne.
Want to learn more? Read the full overview from Taís Laporta.
The core questions asked by animal tallow traders today
For biodiesel and renewable diesel manufacturers, tallow isn’t just an ingredient. It’s a crucial feedstock driving production and profitability. And with the biofuel industry expanding at unprecedented rates, understanding the dynamics of tallow pricing has become essential.
Here’s why?tallow pricing?is dictating competition in global biofuels, the factors influencing these shifts and how accurate price tracking tools such as Fastmarkets are transforming how businesses trade.?
Tallow demand is booming, but supply is relatively flat
Tallow demand is soaring as the global shift toward renewable energy and stricter blending mandates accelerate. But there’s a challenge —supply isn’t growing fast enough to keep up.
So, what’s driving this trend? Learn more about tallow supply and demand trends and prices. Read the full report from our managing editor, Ryan Standard.
Uncertainty around the 45Z Clean Fuel Credit: How is it reshaping the soybean oil market?
Uncertainty surrounding the 45Z Clean Fuel Credit is slowing biofuel producers' demand for soybean oil through early 2025.
Basis indications for US interior and Gulf crude-degummed soybean oil were unchanged day on the day but firmer week on week during the Monday, February 24 session.
The basis on nearby Gulf crude-degummed soybean oil was assessed at a premium of 200-400 basis points per lb to March soybean oil futures on the Chicago Mercantile Exchange, unchanged from the Friday, February 21 assessment.
Some market sources called the Gulf soybean oil market tight and said fuel buyers were at the lower end of the range, while buyers in the export market were at the higher end of the range — which was up from a premium of 300 basis points per lb to March?soybean oil futures?a week earlier.
Soybean oil is one of the most widely used feedstocks in the production of biomass-based diesel and renewable diesel, but in the absence of guidance on the 45Z Clean Fuel Production Credit (CFPC) until earlier this year, biofuel producers were unable to forecast production and feedstock needs into early 2025 and stepped back from the buy side of the market.
How are these shifts reshaping the US biofuel market, and what do they mean for future feedstock demand?
Amanda Luhavalja reports on more details here.
Why use Fastmarkets' soybean meal prices?
For soybean meal buyers, including animal farmers, feed manufacturers and commodity traders, price volatility and market uncertainty remain challenging.
Global factors like fluctuating demand, currency variations and weather disruptions impacting cost mean securing affordable and consistent supplies can be difficult. Additionally, since the?prices of soybean?and?soybean oil?directly influence soybean meal costs, keeping track of these related markets adds another layer of complexity.
Fastmarkets offers daily and market-reflective soybean meal price assessments, along with?bespoke forecasts?and in-depth market analysis. This comprehensive approach helps you as a buyer or producer stay informed about all key price drivers, enabling better cost management, risk mitigation and strategic planning for long-term profitability.
Fastmarkets soybean meal price assessments
On the Fastmarkets platform, you can find daily soybean meal spot price assessments reflecting the fair market value at the most liquid point of the nearby market and forward curves and reflecting the fair market value of physical cargo for loading or delivery up to 9 months forward.
Our upcoming agriculture events
The agriculture market is more volatile than ever, with demand for food, fuel and feedstock pulling in different directions while decentralization, weather and policy shifts add complexity. Join our events for expert insights and unmatched networking to navigate risks, seize opportunities and stay ahead.
We look forward to sharing more market updates and industry insights next month.
For more information about Fastmarkets’ suite of products and services, visit our website.
Until next time!
Fastmarkets agriculture team