Biofuel demand drives soybean oil to four-year high

Biodiesel plants ran at 375% capacity through spring 2026. Soybean oil futures traded near four-year highs in mid-June as renewable diesel and sustainable aviation fuel output reached all-time highs in May, and the industry drew on soybean oil, distillers corn oil, recycled cooking oil and animal fats.

Soybean oil prices started surging in spring 2021 and reached record highs in 2022 as lower international supplies of competing vegetable oils tightened the global market and domestic biofuel demand accelerated the rally. USDA raised the U.S. soybean crush forecast for marketing year 2025/26 by 20 million bushels in June to 2.65 billion bushels on strong demand for soybean products and strong crush margins.

USDA’s May 2026 Oil Crops Outlook projected the 2026/27 U.S. soybean crush at a record 2.54 billion bushels and U.S. soybean production at 4.4 billion bushels, up 4 percent. Higher domestic use of soybean oil for biofuel production is embedded in that outlook.

EPA finalized its Renewable Fuel Standard rule for 2026 and 2027 on March 27, 2026, and published it April 1. The rule includes record renewable fuel volumes and a 70% reallocation of small refinery exemptions granted for 2023-2025. Farmdoc Daily estimated the rule implies required monthly biomass-based diesel production of 508 million gallons in 2026 and 536 million gallons in 2027, above the all-time monthly high of about 436 million gallons in June 2024.

A CoBank estimate put added renewable biodiesel demand at 5.5 billion gallons by 2030, which would require 17.9 million additional acres of soybeans annually. Biofuel plants bid against food manufacturers for soybean oil and against ethanol plants for distillers corn oil, while also pulling more recycled cooking oil and animal fats into the fuel pool.