Jul 20 / Luiz Fernando G. Roque

U.S. Soybean Crushing: Stronger Demand for Biodiesel Provides Key Support for the Market

  Back to main blog page

Increased biodiesel blending in the U.S. boosts North American crushing


U.S. soybean crushing has taken on even greater prominence in the market over the past few months, especially following confirmation of the increase in the mandatory biodiesel blend in the United States, which was confirmed by the U.S. government in March 2026.

Since the U.S. Environmental Protection Agency (EPA) proposal was presented in June 2025, the soybean market has begun to pay closer attention to the potential impacts on domestic demand for soybean oil and, consequently, on U.S. soybean crushing. This is because the EPA’s proposal called for a strong increase (approximately 67%) in the mandatory volume of biodiesel to be blended with diesel in the United States, potentially raising, as a result, the demand for raw materials used to produce this biodiesel. 

In this regard, soybean oil stands out as the primary feedstock for biodiesel production in the U.S. At the end of March, the U.S. government set an increase of approximately 61% in the volume, which, although slightly below the proposal (~67%), still represents a strong increase.

Soybean oil prices have been gaining momentum since the EPA’s proposal was announced, and gained even more momentum following the outbreak of the war between the U.S. and Iran — which led to a strong rise in oil prices, the benchmark commodity for “energy” — and the U.S. government’s confirmation of the new blend.

CBOT | Soybean Oil | Spot Position (US$c/lb)

                                                                                                                                                                                                                                                                                                                    Source: LSEG



Soybean oil’s share of U.S. crushers’ margins has risen since the EPA’s proposal was presented (due to the rise in soybean oil prices), remaining high and above levels recorded in previous seasons. Currently, the percentage stands at around 54%, indicating that soybean oil accounts for the largest portion of U.S. crushers’ margins.


U.S. – Soybean Oil’s Share of Margin (%)

                                                                                                                                                                                             Source: LSEG, Hedgepoint



With the rise in soybean oil prices and its share of the margin, the “on-screen” crushing margin (board crush) — a calculation representing the sum of the values of soybean meal and soybean oil (crushing byproducts) minus the value of soybeans (the raw material being crushed) — has also strengthened in the U.S., reaching the highest levels in the country’s history.

U.S. – Board Crush (US$c/bu)

                                                                                                                                                                              Source: Bloomberg, Hedgepoint



This fact is key to understanding and projecting the pace of U.S. crushing, as U.S. crushers have a strong incentive to continue expanding crushed volumes in the face of an extremely favorable profit margin. In this regard, U.S. crushing data continues to point to record levels, confirming strong domestic demand for soybeans.

U.S. – Soybean Crushing – Monthly (M bu)

                                                                                                                                                                                             Source: NOPA, Hedgepoint

U.S. – Soybean Crushing – Cumulative (M bu)

                                                                                                                                                                                       Source: NOPA, Hedgepoint



The expansion of U.S. crushing capacity continues, with expansions of existing plants and new plants coming online. Recently, a new crushing plant was inaugurated in Illinois, the leading U.S. soybean-producing state, further expanding U.S. capacity. In addition, new projects are planned for the coming months and years. We believe that, as crushing capacity continues to expand, the USDA will likely raise its crushing estimate in the U.S. supply-and-demand outlook. Currently, the estimate for the 2026/27 season points to a crush of 74.8 million metric tons. Soon, we should see that figure surpass the 75 million metric ton mark.

Soybeans | U.S. | Supply and Demand (in M tons)

                                                                                                                                                                 Source: USDA, Hedgepoint



As crushing increases, soybean oil consumption is also rising, reaching new record levels. This confirms the trend of rising demand, driven primarily by the increase in the mandatory biodiesel blend.

U.S. – Soybean Oil Disappearance (M lbs) 

                                                                                                                                                                                         Source: NOPA, Hedgepoint



As such, demand for soybean crushing and demand for biodiesel in the U.S. are important factors that must be closely monitored, as these forces are currently providing fundamental support for the soybean market.

Market Intelligence - Grains and Oilseeds


Written by Luiz F. Roque
Luiz.Roque@hedgepointglobal.com

Revised by Thaís Italiani
www.hedgepointglobal.com

Disclaimer

This document has been prepared by Hedgepoint Schweiz AG and its affiliates (“Hedgepoint”) solely for informational and instructional purposes, without intending to create obligations or commitments to third parties. It is not intended to promote or solicit an offer for the sale or purchase of any securities, commodities interests, or investment products.
Hedgepoint and its associates expressly disclaim any liability for the use of the information contained herein that directly or indirectly results in any kind of damages. Information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information.
The trading of commodities interests, such as futures, options, and swaps, involves substantial risk of loss and may not be suitable for all investors. You should carefully consider wither such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results. Customers should rely on their own independent judgment and/or consult advisors before entering into any transactions.
Hedgepoint does not provide legal, tax or accounting advice and you are responsible for seeking any such advice separately.
Hedgepoint Schweiz AG is organized, incorporated, and existing under the laws of Switzerland, is filiated to ARIF, the Association Romande des Intermédiaires Financiers, which is a FINMA-authorized Self-Regulatory Organization. Hedgepoint Commodities LLC is organized, incorporated, and existing under the laws of the USA, and is authorized and regulated by the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA) to act as an Introducing Broker and Commodity Trading Advisor. HedgePoint Global Markets Limited is Regulated by the Dubai Financial Services Authority. The content is directed at Professional Clients and not Retail Clients. Hedgepoint Global Markets PTE. Ltd is organized, incorporated, and existing under the laws of Singapore, exempted from obtaining a financial services license as per the Second Schedule of the Securities and Futures (Licensing and Conduct of Business) Act, by the Monetary Authority of Singapore (MAS). Hedgepoint Global Markets DTVM Ltda. is authorized and regulated in Brazil by the Central Bank of Brazil (BCB) and the Brazilian Securities Commission (CVM). Hedgepoint Serviços Ltda. is organized, incorporated, and existing under the laws of Brazil. Hedgepoint Global Markets S.A. is organized, incorporated, and existing under the laws of Uruguay. In case of questions not resolved by the first instance of customer contact (client.services@Hedgepointglobal.com), please contact internal ombudsman channel (ombudsman@hedgepointglobal.com – global or ouvidoria@hedgepointglobal.com – Brazil only) or call 0800-8788408 (Brazil only).
Integrity, ethics, and transparency are values that guide our culture. To further strengthen our practices, Hedgepoint has a whistleblower channel for employees and third-parties by e-mail ethicline@hedgepointglobal.com or forms Ethic Line – Hedgepoint Global Markets.
“HedgePoint” and the “HedgePoint” logo are marks for the exclusive use of HedgePoint and/or its affiliates. Use or reproduction is prohibited, unless expressly authorized by HedgePoint.
Furthermore, the use of any other marks in this document has been authorized for identification purposes only. It does not, therefore, imply any rights of HedgePoint in these marks or imply endorsement, association or seal by the owners of these marks with HedgePoint or its affiliates.

To access this report, you need to be a subscriber.