Argentina soyoil trades at decade low to US on harvest, biofuels

Soybean oil from Argentina, the world’s biggest exporter, is trading at the cheapest in at least a decade relative to rival supplies out of the United States, as the harvest on the Pampas crop belt hits full stride and after Washington increased biofuel blending mandates.

The discount paid for Argentine soyoil fell to about 24 cents per pound below global benchmark futures on the Chicago Board of Trade this week, according to Commodity3 data. That’s the lowest level in a series going back to 2016. The gap on Friday was slightly narrower at 23.6 cents.

Argentine farmers are collecting a bumper soybean crop forecast to be 48.6 million metric tons, according to the Buenos Aires Grain Exchange, which said in a Thursday report that yields in the country’s prime growing region are above historical averages. Processors who turn the beans into oil and feed meal to ship abroad usually snap up supplies and ramp up production at this time of year.

The big discount also comes as prices for US soyoil climb after the Trump administration in March implemented bigger biofuel blending requirements that’ll boost demand for soyoil and corn ethanol. Soyoil futures have gained more than 50 percent this year.