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The U.S. Department of Agriculture (USDA) has held its ground on soybean oil biofuel demand, maintaining its projection for 17.8 billion pounds to be used in production during the 2026-27 marketing year. According to the October 9 World Agricultural Supply and Demand Estimates (WASDE), this forecast remains unchanged from September and represents a substantial climb from the 14.8 billion pounds estimated for 2025-26.
This 3-billion-pound increase, marking a 20.3% year-over-year jump, carries significant implications for the renewable fuel credit market. Using industry standards of 7.5 pounds of soybean oil per gallon of fuel, the additional volume could produce roughly 400 million gallons of biodiesel. Given a 1.5-RIN-per-gallon equivalence, this would generate approximately 600 million D4 RINs (Renewable Identification Numbers).
The calculations for renewable diesel show a similar trajectory. With the U.S. Environmental Protection Agency (EPA) estimating input volumes at 3.1% higher than output, the 3-billion-pound increase supports roughly 388 million gallons of renewable diesel. Because the marketing year spans two calendar years with shifting RIN equivalence values—projected at 1.7 per gallon in 2026 and 1.6 in 2027—the incremental use could yield a total of approximately 630 million D4 RINs.
While these figures are illustrative benchmarks rather than firm generation forecasts, they provide a vital measure against which the emerging D4 production path can be judged. Recent EPA data has yet to reflect an acceleration matching the growth implied by higher Renewable Fuel Standard (RFS) volumes, making the USDA's persistent assumption of sharp demand growth a focal point for industry analysts.
In its broader balance sheet, the USDA left the 2026-27 soybean crush forecast at 2.780 billion bushels and the season-average oil price at 70 cents per pound. However, the agency tightened the supply outlook by reducing projected ending stocks to 1.797 billion pounds—down from September's 1.877 billion—and lowering beginning stocks to 1.657 billion pounds. These reductions were partially offset by raising import projections to 700 million pounds. The decision to maintain the high biofuel usage forecast amid a tighter supply balance underscores the agency's confidence in sustained biomass-based diesel momentum.
Source: Fastmarkets