NASHVILLE, Tenn. (RFD News) —U.S. soybean oil demand is expected to climb in 2026/27 as federal biofuel policy pushes biomass-based diesel production higher. USDA’s Economic Research Service says record Renewable Volume Obligations for 2026 and 2027 are expected to increase demand for biofuel feedstocks.
The 45Z tax credit also changes the feedstock picture. ERS says the credit now limits eligibility to fuel produced in the United States with feedstocks sourced from North America and removes indirect land-use change from carbon score calculations.
Soybean oil should benefit from that change. USDA forecasts soybean oil use for biomass-based diesel production at 17.8 billion pounds in 2026/27, up 3.6 billion pounds from 2025/26. Canola oil use is also expected to grow.
Renewable diesel capacity has expanded sharply, rising from 900 million gallons in January 2021 to 5 billion gallons in December 2025. That growth increases competition for vegetable oils, animal fats, and used cooking oil.
ERS projects Central Illinois soybean oil prices at 70 cents per pound, up from 63 cents.
Farm-Level Takeaway: Stronger biofuel policy support could lift soybean oil demand and help maintain crush margins in soybean markets.
Tony St. James, RFD News Markets Specialist
Shrinking sheep numbers contrast with gradual goat expansion, signaling tighter lamb supplies but steadier growth potential for meat goats.
February 02, 2026 10:29 AM
·
Smaller cow numbers and a declining calf crop point to prolonged tight cattle supplies, limiting near-term herd rebuilding potential.
January 30, 2026 03:42 PM
·
Jim Matheson, CEO of the National Rural Electric Cooperative Association, provides new updates on winter storm impacts and the outlook for rural power reliability.
January 30, 2026 02:59 PM
·
Strong rail demand and higher fuel costs raise transportation risk even as barge and export flows stabilize.
January 30, 2026 02:21 PM
·
Traders say that shift could eventually prompt the USDA to scale back soybean export projections, noting the outlook differs greatly for other grain commodities.
January 30, 2026 01:13 PM
·
Strong blending demand continues to support ethanol use even as production and exports fluctuate.
January 30, 2026 07:00 AM
·
