Soybean oil futures fell 5% after a temporary ceasefire between the US and Iran triggered a sharp drop in crude prices, reducing the attractiveness of crop‑based biofuels.

The agreement lifted geopolitical risk in the Middle East, pushing oil down and eroding the price premium that makes soybean oil competitive against petroleum‑derived alternatives.

Investors now face a narrower margin for soybean oil producers, as lower crude prices compress feedstock cost advantages and dampen earnings expectations.

With biofuel subsidies still in place, the market will monitor whether the dip in oil sustains or recovers, but the immediate effect is a clear contraction in soybean oil’s valuation relative to competitors.