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
Strong export demand supports feed grain prices, but drought risk and seasonal patterns favor disciplined early-year marketing.
January 06, 2026 02:46 PM
·
Corn export strength remains a key demand anchor, while China’s continued involvement in soybeans and sorghum bears close watching for price direction.
January 06, 2026 01:12 PM
·
Strong crush demand and rising ethanol production are pressuring feedstocks, as traders monitor storage risks and supply chain uncertainty and await the upcoming January WASDE report.
January 06, 2026 01:04 PM
·
Improving consumer confidence supports baseline food and fuel demand, but cautious spending limits upside potential for ag markets in 2026.
January 05, 2026 03:00 PM
·
Strong ethanol production and export trends continue to support corn demand despite seasonal fuel consumption softness.
January 05, 2026 02:49 PM
·
Benchmark machinery costs against those of similar-sized, high-performing operations to inform equipment and investment decisions.
December 25, 2025 12:00 PM
·
