U.S. Soybean Crush Hits Record High as Biofuel Demand Grows, Exports Decline

The U.S. soybean crush for the 2025/26 marketing year is projected to reach a record 2.54 billion bushels, a 50-million-bushel increase from last month’s forecast, according to the latest Oil Crops Outlook report from the USDA’s Economic Research Service. The upward revision is driven by rising domestic demand for soybean oil in biofuel production, spurred by recent policy changes.

On June 13, the Environmental Protection Agency (EPA) proposed higher Renewable Fuel Standard volumes for 2026 and 2027 while reducing Renewable Identification Numbers (RINs) for imported biofuels and foreign feedstocks. This shift incentivizes greater use of domestic soybean oil in biofuel manufacturing. However, U.S. soybean exports are expected to decline by 70 million bushels to 1.75 billion bushels due to increased competition from Argentina and Brazil. Argentina’s export surge ahead of higher July export taxes and Brazil’s delayed shipments have pressured U.S. trade prospects.

With reduced exports outweighing higher crush volumes, U.S. soybean ending stocks are forecast to rise to 310 million bushels. The season-average farm price for soybeans is projected at $10.10 per bushel, down 15 cents from last month. Meanwhile, soybean meal prices are steady at $290 per short ton, while soybean oil prices climbed to $0.53 per pound.

Domestic Oilseed Production Adjustments

U.S. oilseed production for 2025/26 is forecast at 128.3 million metric tons, slightly lower than last month’s estimate. Soybean planted area is pegged at 83.4 million acres, with harvest expected on 82.5 million acres. Despite favorable crop conditions—66% rated good-to-excellent as of July 6—yields remain unchanged at 52.5 bushels per acre, keeping production at 4.34 billion bushels.

Canola acreage saw a sharp decline, particularly in North Dakota, where plantings dropped by 200,000 acres. Total U.S. canola production is projected at 4.3 billion pounds, down 13% year-over-year. Sunflowerseed acreage also dipped, falling 7% from March intentions, though flaxseed plantings surged to 375,000 acres—the highest since 2015.

Peanut production is set to hit a record 7.4 billion pounds, thanks to expanded acreage and improved yields. The season-average peanut price is forecast at 25 cents per pound, down 3% from last year.

Soybean Crush Expansion Driven by Biofuel Policies

The U.S. soybean crush industry has expanded significantly, with capacity now estimated between 2.8 and 3.1 billion bushels. Daily crush rates have risen 27% in the North Central region since 2020/21, reflecting investments in new and modernized facilities.

The EPA’s proposed Renewable Volume Obligations (RVOs) and the One Big Beautiful Bill Act further bolster demand for domestic feedstocks. Soybean oil use in biofuels is projected to reach 15.5 billion pounds in 2025/26, up 3.3 billion pounds from the revised 2024/25 forecast. Consequently, soybean oil exports are expected to drop to 700 million pounds amid higher domestic consumption.

Global Market Shifts

Globally, rapeseed production is forecast to decline, with lower outputs in Canada and the U.S. offsetting gains in the EU and Moldova. Meanwhile, global soybean crush is projected to hit a record 367.7 million metric tons, led by increases in the U.S., Ukraine, and Turkey.

Brazil’s decision to raise its biodiesel blend to 15% will further tighten soybean oil supplies, reducing global trade volumes. Argentina remains the top exporter, accounting for nearly half of global soybean oil shipments.

This article has been republished from The Global Agriculture.