The U.S. Department of Agriculture announced that in the 2025-26 marketing year (starting October1), biofuel producers are expected to consume a record 15.5billion pounds of soybean oil-over half of total U.S. production-a sharp 11.5% increase from last month's forecast and 26.5% above current use.

This surge reflects aggressive policy push: the EPA recently raised biofuel blending mandates for 2026 and 2027, added stricter limits on imported renewable feedstocks, and the new 45Z clean-fuel tax credit (from the 2025 budget law) further incentivizes domestic processing.

With so much domestic soybean oil diverted to fuel, export volumes are projected to collapse from 2.6billion pounds to just 700million pounds, shifting the U.S. from exporter to net domestic consumer in this segment.

The policy floodgates are also triggering a surge in soybean crushing, with USDA projecting record-level crush volumes exceeding 2.54billion bushels-roughly 58% of total domestic disappearance, an 18-year high.

That inward pivot has multiple implications:

• Crushers and co-ops will likely experience a boom, with plants running at full tilt or expanding to meet fuel-sector demand.

• Soybean farmers gain resilience: strong domestic oil demand may help soften the effects of slumping export markets-especially with China purchases still sluggish.

• Futures markets show response: Chicago soybean-oil contracts have rallied toward 7½-month highs on mounting biofuel optimism.

Still, some uncertainties loom: biofuel policy debates continue in Washington, and if future blending mandates falter-like the proposed 2026 mandate disappoints-processors could face pressure, as seen earlier this summer when ADM pulled back bids on new crop soybeans amid crush-margin concerns.