The US Department of Agriculture (USDA) significantly raised its estimate for soybean oil use in biofuel production for the 2025–2026 season in the World Agricultural Supply and Demand Estimates (WASDE) report issued on July 11. At the same time, it reduced its soybean production forecast.
Key Points from the Report
- 2025–2026 soybean production:
Production is expected to reach 4.3 billion bushels, down 5 million bushels from last month due to lower harvested area, while the expected yield remains unchanged at 52.5 bushels per acre. - Soybean crush:
The crush forecast was raised by 50 million bushels to 2.54 billion bushels, supported by higher demand for soybean oil in biofuel production. - Soybean oil use in biofuel:
The USDA raised its estimate to 15.5 billion pounds for the 2025–2026 season, compared with 13.9 billion pounds in last month’s report.
For comparison:- 2024–2025 season: 12.25 billion pounds
- 2023–2024 season: 13.989 billion pounds
Influencing Factors
- The new forecast is based on the US Environmental Protection Agency (EPA) proposal for the 2026 and 2027 renewable fuel standards, which includes:
- A notable increase in biomass-based diesel requirements.
- A reduction in the number of Renewable Identification Numbers (RINs) for imported fuel or fuel produced from foreign feedstocks.
This could increase demand for domestically produced oils such as soybean oil.
Trade and Production
- Imports: Soybean oil imports are expected to rise to meet stronger domestic demand.
- Exports: Exports are expected to decline due to higher domestic demand.
- Food, feed, and industrial use: Unchanged.
- Soybean meal production: Up by 1.2 billion short tons.
- Domestic consumption rose by 500,000 tonnes to 41.8 million tonnes, up 3% from the previous year.
- Exports increased by 700,000 tonnes to 18.7 million tonnes.
- US soybean exports for 2025–2026:
Reduced by 70 million bushels to 1.75 billion bushels due to higher domestic demand, stronger exports from Argentina and Ukraine, and large Brazilian supplies during the peak US export season. - Ending stocks: Up by 15 million bushels to 310 million bushels.
Expected Prices for 2025–2026
- Soybeans: $10.10 per bushel, down 15 cents from last month.
- Soybean meal: $290 per short ton, down $20.
- Soybean oil: 53 cents per pound, up 7 cents.
Global Outlook
- Global soybean production: Increased due to higher output in Ukraine.
- Global crush: Increased by 1.1 million tonnes to 367.7 million tonnes, with gains in the United States, Ukraine, and Turkey, and declines in India, Mexico, and Saudi Arabia.
- Global trade:
- Higher soybean meal imports by Colombia, Iran, Saudi Arabia, Mexico, and Vietnam.
- Lower US soybean exports, with higher exports from Argentina and Ukraine.
- Lower soybean imports by India, Mexico, and Saudi Arabia.
- Global ending stocks: Up by 800,000 tonnes to 126.1 million tonnes.
