Soyoil futures jumped 3% after Washington accused Argentina and Indonesia of dumping in their $1.5bn biodiesel exports to the US – price gains that according to Rabobank could herald larger rises to come.
Soyoil futures for July touched 33.47 cents a pound in Chicago before easing back to 33.13 cents a pound in late morning deals, a gain of 1.9% on the day.
The headway followed the release by the US International Trade Commission that it had "made affirmative determinations" in its probe into dumping by Argentina and Indonesia on biodiesel, adding that further details of its findings would be revealed later.
"There is a reasonable indication that a US industry is materially injured by reason of imports of biodiesel from Argentina and Indonesia that are allegedly subsidised and sold in the United States at less than fair value," said the commission, which will now investigate potential tariffs.
The finding was welcomed by US biofuel producers including Archer Daniels Midland, the ag trading giant, which said it was "pleased to see that the ITC has taken the first step toward imposing countervailing and antidumping duties on biodiesel imported from Argentina and Indonesia.
"The facts clearly show that Argentina and Indonesia are engaging in unfair trade practices, and we are confident that duties will be imposed when the final decision is made."
Rabobank in a report earlier on Friday said that Washington was likely to impose "significant" import tariffs on biodiesel imports from Argentina and Indonesia, if it assessed that the countries were backing their, substantial, biodiesel exports to the US with "unfair" subsidies.
The EU in 2013, after a similar probe, imposed anti-dumping duties of 19% on imports of Indonesian biodiesel, and 25% on Argentine supplies.
The bank added that the introduction of duties would - in cutting imports from origins which exported 1.85m tonnes of biodiesel, worth $1.47bn, to the US last year – open up a large hole in US supplies.
Indeed, given that the US mandates a minimum biodiesel consumption, the tariffs could herald a surge in demand for domestic supplies of the biofuel – and thus for the vegetable oils from which it is made.
In the US, and Argentina, soyoil is the primary feedstock for biodiesel plants, although Indonesia makes its supplies from palm oil,
Rabobank estimated the void as equivalent to 4.06bn pounds of soyoil, the main vegetable oil produced in the US itself, adding 18% to annual use, although thanks to imports, and used of rival feedstocks such as corn oil, the gap may be "well below" that.
Nonetheless, the bank forecast that extra domestic consumption would be sufficient to cut US soyoil inventories by 500m pounds, "which would reduce 2017-18 US ending stocks to some of their lowest levels in 20 years".
And - with tighter inventories implying higher values as buyers are forced to pay up to secure supplies – "US soyoil prices could increase by 15-20%.
"The impact of import duties from both Indonesia and Argentina could have a significant impact on US soyoil prices".
US tariffs may affect too prices of palm oil, the vegetable oil that Indonesia uses to make its biodiesel -- although the impact here would be negative, the bank said.
The US accounts for 90-93% of Indonesian biodiesel exports.
"Any duty imposed on US biodiesel imports from Indonesia… could prove slightly bearish to global palm oil prices."
Tariffs may also put pressure on values of soymeal, which is also produced from soybean crushing, and would see its supplies boosted as a result of the clamour for soyoil.
"The resulting increased US soybean crush could be bearish for US soymeal prices, and would likely require higher US soymeal exports."
The forecasts follow comments earlier this week from Soren Schroder, chief executive of Bunge, the global agribusiness giant which has soy crushing operations in both the US and Argentina, that the imposition of the tariffs would be a big thing.
It "will create an enormous demand for vegetable oil, both of soybean oil and canola oil, which will be very positive to crushing margins in both Canada and the US," Mr Schroder told investors.
"So that part would be a big boost to North American crushing margins, both in softseeds and in soy crush."
While in Argentina the duties would mean that "biodiesel margins… won't be there and the industry won't run", the curbs would overall be a "sizeable net positive" for Bunge, he said.
By Mike Verdin