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
Record pace corn exports are helping stabilize prices despite softer global grain production and ongoing supply competition.
December 25, 2025 06:00 AM
·
Broader export demand helps stabilize prices and supports stronger marketing opportunities over time.
December 24, 2025 03:00 PM
·
Rep. Randy Feenstra, R-IA, details how the “One, Big, Beautiful Bill” Act (OBBBA) supports farmers, biofuels, and rural communities with tax breaks, crop insurance relief, and ag infrastructure.
December 23, 2025 02:01 PM
·
More than 1,100 residents and farmers have signed a letter urging Ag Secretary Brooke Rollins to step in, saying the proposal threatens irrigation supplies and long-term farm viability in the region.
December 23, 2025 11:37 AM
·
With record grain harvests and rising global ethanol demand, leaders across the ag and energy sectors are pushing for year-round E15 sales to mitigate the strain on grain trade.
December 22, 2025 02:45 PM
·
Stronger rail movement and lower fuel prices are easing logistics, even as export pace and river conditions remain uneven.
December 22, 2025 02:12 PM
·
