Soybean Oil Surpasses Meal as Crushing Economics Shift

The traditional economics of soybean crushing are being rewritten as soybean oil has become the main revenue driver, surpassing soybean meal in importance. This shift is largely due to increased demand for soybean oil as an energy feedstock, driven by government policies and market trends.

In the United States, the EPA's largest-ever biodiesel mandate of 9.07 billion gallons in 2026 has created a surge in demand for soybean oil. U.S. consumption is expected to reach approximately 18 billion pounds this year, with domestic production unable to meet demand and leaving little surplus for exports.

Indonesia's B50 mandatory biodiesel blending program has also removed between 15 and 16 million metric tons of palm oil from the export market annually, further tightening global vegetable oil supplies. Climate risk, particularly El Niño, is adding another layer of uncertainty to the market, threatening Southeast Asian palm production.

In Brazil's domestic market, soybean meal prices are rising due to increased demand and restricted availability. However, soybean oil prices are also on the rise, driven by strong demand from the energy sector and a shortage of supplies in the physical market.