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
Gov. Gavin Newsom has until October 12 to sign a bill passed by the California state legislature allowing E15 sales.
September 30, 2025 12:59 PM
·
The Final Grain Stocks Report may be the last key figures we see if a government shutdown halts future updates.
September 30, 2025 12:25 PM
·
“Those could’ve easily been our beans going over there. It goes to show that if that opportunity is there, China would be willing to buy.”
September 29, 2025 03:59 PM
·
Strong corn exports are anchoring U.S. trade, while soybean sales remain steady, but shipments lag.
September 26, 2025 04:48 PM
·
As input costs continue to rise, diesel prices have held steady in recent weeks, according to energy analysts at GasBuddy.
September 25, 2025 12:02 PM
·
U.S. soybean farmers are growing increasingly frustrated by Argentina’s gains in Chinese grain contracts and Trump’s pledge of economic support for the South American ally.
September 25, 2025 11:51 AM
·
