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United States soybean oil inventories are continuing their downward trajectory, driven by robust demand from the biofuel sector and a notable deceleration in domestic oilseed processing. Data released by the US Census Bureau reveals that stocks reached a mere 660,000 tons by the end of September 2026, marking a 17% decline compared to the same period in the previous year. This figure represents the lowest inventory level recorded since December 2014, signaling a tightening supply environment in the domestic market.
A primary catalyst for this inventory depletion is the aggressive consumption of soybean oil for the production of biodiesel and renewable diesel. This surge in domestic demand has slashed inventory coverage to just 17 days of consumption as of late September, a sharp drop from the 30-plus days of coverage seen at the beginning of 2026. This trend highlights the intensifying rivalry for feedstock between biofuel energy producers and traditional vegetable oil consumers in the food industry.
Despite the official figures, some analysts suggest that actual US soybean oil stocks could be higher than reported. This discrepancy is attributed to the rapid expansion of renewable diesel production capacity, which often operates through non-traditional supply chains that may fall outside standard agricultural reporting. Significant volumes of oil may be held within integrated processing facilities or farmer-owned cooperatives, complicating the accurate assessment of the national supply-demand balance.
Market pressures have been further exacerbated by a slowdown in soybean crushing activities, largely due to harvest delays. In September, US processors handled 5.41 million tons of soybeans, the lowest monthly volume in 13 months. This also marked the first year-on-year contraction in soybean crushing since February 2025. The limited flow of newly harvested soybeans to processing plants has constrained oil production at a time when domestic demand remains consistently high.
While soybean processing has cooled, US processors have ramped up their utilization of alternative oilseeds. Canola crushing hit a record 217,000 tons in September, surpassing the 209,000 tons processed a year earlier. Furthermore, total US canola crushing for the June–September 2026 period reached a record-breaking 815,000 tons, up from 730,000 tons in the prior year. This shift reflects a strategic move toward alternative feedstocks to bridge the gap in the US biofuel industry's requirements.
Source: UkrAgroConsult