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
Allowing year-round sales of E15 nationally could deliver billions in economic gains, according to a new study from the Renewable Fuels Association and National Corn Growers Association.
September 16, 2025 02:29 PM
·
Farmers await concrete trade commitments from China. Until then, export prospects for soybeans, corn, and sorghum remain uncertain against strong South American competition.
September 16, 2025 11:04 AM
·
U.S. trade talks with China resume, but meat industry leaders say dealing with shifting demand and market uncertainty is nothing new in this side of the ag sector.
September 15, 2025 12:57 PM
·
Year-round sales of E-15 are another major topic on Capitol Hill, which, according to Rep. Adrian Smith (R-NE), is one issue up for debate this session with significant bipartisan support.
September 15, 2025 12:09 PM
·
American Soybean Association President Caleb Ragland joins us to share his reaction to September’s WASDE and discuss the trade uncertainty between China and his industry.
September 12, 2025 02:13 PM
·
Harvested acres are estimated at 90.0 million, making this year’s corn crop one of the largest since the 1930s.
September 12, 2025 12:38 PM
·
