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Recent data from the National Oilseed Processors Association (NOPA) released on October 15 reveals that soybean oil stocks among its members dropped by 12.3% month-on-month, hitting a 12-year low of 1.05 billion pounds in September. This figure represents a sharp decline from the 1.20 billion pounds recorded in August and a 15.3% decrease compared to the 1.24 billion pounds held in September 2025. NOPA members are responsible for processing approximately 99% of the US soybean crop.
In the United States, soybean oil has become the critical vegetable oil feedstock for biomass-based diesel and renewable diesel production. Demand has surged throughout the year as the industry gained clarity on the 45Z Clean Fuel Production Credit and finalized the 2026-2027 Renewable Volume Obligations (RVOs), which set ambitious biofuel blending mandates.
Despite the long-term upward trend, market participants noted a brief cooling in demand over the last month. Several biofuel facilities across the US Gulf Coast and the Midwest were reportedly offline for both scheduled and unscheduled maintenance, temporarily easing the pressure on feedstock procurement.
The NOPA report also highlighted a slowdown in processing activity. The US soybean crush fell to a 13-month low of 196.3 million bushels in September, a 4.4% drop from August's 205.456 million bushels. Traders linked this decline to typical seasonal patterns and adverse weather conditions across the western Corn Belt. Heavy rainfall in the Midwest during late September hindered harvest progress and impacted crop quality, leaving some crushers—particularly in Iowa—scrambling for supply or forced to halt operations.
The broader industry continues to expand to meet future needs. Since 2021, the US crush sector has seen significant investment in facility upgrades and new construction. A notable example is CHS, which recently confirmed plans for a $770 million processing plant in Evansville, Wisconsin. The facility, expected to be operational by fall 2028, will have an annual capacity of 80 million bushels.
Forecasts from the U.S. Department of Agriculture (USDA) remain bullish. In its October 9 World Agricultural Supply and Demand Estimates (WASDE), the agency maintained its 2026-2027 outlook for soybean oil use in biofuel production at 17.8 billion pounds—a 22% increase from the previous season's 14.55 billion pounds. Total industrial demand for US soybean oil is projected to reach approximately 33.11 billion pounds by the 2026-2027 season.
Under the US Renewable Fuel Standard (RFS), petroleum refiners are required to blend specific volumes of renewable fuels or acquire Renewable Identification Numbers (RINs). Data shows the industry is already ramping up to meet these targets; D4 RIN generation reached 753 million in September, reflecting an 8.7% monthly increase and a 13.7% rise compared to the same period last year.
Source: Fastmarkets