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
Midwest corn and soy producers are monitoring for disease and lower yields due to the ongoing drought over the last 30 days.
September 24, 2025 04:38 PM
·
Argentina hopes to boost demand, but critics see the move as a blow to American farmers.
September 24, 2025 11:35 AM
·
China is making strategic moves by purchasing more soybeans from Argentina and may soon follow the EU and reopen its market to Brazilian chicken exports.
September 23, 2025 01:21 PM
·
Lamb prices have seen a surprising surge driven by a tight supply and increasing demand in non-traditional markets.
September 23, 2025 12:40 PM
·
Farmers should watch for soybean export rebounds with harvest, while corn and wheat shipments remain strong and sorghum demand struggles.
September 23, 2025 11:54 AM
·
Rollins says the new trade relationship with Taiwan, which is committed to buying a significant amount of U.S. soy, could not come at a better time for farmers facing financial strain.
September 23, 2025 11:06 AM
·
