Effective March 2026, the underlying physical assessment that underpins the European Rapeseed Oil FOB Dutch Mill (Argus) futures contract on CBOT changed from the first nearby three-month price to a prompt price which is assessed on a 5 – 40 day forward basis1. The effect of this change is that it will help to align the futures contract month to the underlying delivery period for the FOB Dutch Mill rapeseed oil physical market.
Argus Media is a long-established price benchmark for the European RSO trade. The prompt 5 – 40 day assessment is the spot pricing basis for the physical RSO market with the crushers using it to price their output and the biofuels markets using this to price the value of the feedstocks.
The RSO futures are a simple cash-settled structure – the final settlement price is the monthly average of daily Argus spot assessments of the prompt physical FOB Dutch Mill RSO for delivery 5 – 40 days ahead.
The structure of the futures
|
Contract month |
Futures final settlement |
|---|---|
|
April-2026 |
Contract settles against the published Argus spot assessments for prompt RSO during the month of April |
|
May-2026 |
Contract settles against the published Argus spot assessment for prompt RSO during the month of May |
|
June-2026 |
Contract settles against the published Argus spot assessment for prompt RSO during the month of June |
|
July-2026 |
Contract settles against the published Argus spot assessment for prompt RSO during the month of July |
The European Union remains the largest producer and consumer of rapeseed oil. Demand comes from three sectors – biofuels, food and other industrials. European demand for rapeseed oil is projected at around 10.1 million tonnes for the latest 2025/2026 marketing year. The biofuels sector accounts for about 60% – 65% of rapeseed oil demand with food accounting for 30% – 35% of demand.
Example: How a European rapeseed crusher can use European RSO futures to hedge
A rapeseed crusher can use the futures contract to lock in a profit margin to protect against falling European rapeseed oil (oil) prices, whereas a biofuels producer can use the futures to protect against rising oil prices impacting margins. For a crusher, the example below could be used as a financial hedge against volatility in the oil market.
The goal: A crusher wants to lock in a price for 1,000 tonnes of oil they will produce in May 2026 to protect against the price of oil falling before they produce and sell it.
Action: To do this, the crusher sells 50 lots of May futures (1 lot = 20 metric ton) at a price of €950 per metric ton.
During May, the crusher delivers the oil to the biofuels producer with the contract being based on the monthly average of the Argus prompt RSO assessment. During the delivery month, prices have dropped to around €900 per metric ton therefore, the crusher receives the sale price of €900 per metric ton, which equates to a loss of €50 per metric ton.
The payoff (the hedge)
The financial hedge: The futures contract for May settles at €900 per metric ton. However, since the crusher sold May futures at €950 per metric ton, the crusher made a profit of €50 per metric ton.
Net Position: The €50 loss on the physical sale of the oil is offset by a €50 per metric ton gain on the financial contract. Therefore, the net sale price is €950 per metric ton.
References
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
