Growing US biofuel production intensifies competition for soybean oil

Competition for soybean oil is intensifying in the United States among biofuel producers, the food industry and the oleochemical sector amid declining stocks and growing demand from the energy sector. Increased use of vegetable oils in renewable diesel and biodiesel production is raising concerns about higher feedstock costs for manufacturers of food products, detergents, cosmetics, lubricants and other industrial products.

According to the National Oilseed Processors Association (NOPA), soybean oil stocks held by its members fell by 12.3% month-on-month in September 2026 to 1.05 bln pounds, the lowest level since 2014. Stocks were also 15.3% lower year-on-year. Meanwhile, soybean crushing declined to 196.3 mln bushels, a 13-month low, due to seasonal plant maintenance and weather-related harvest delays.

One of the main drivers of intensifying competition is the growing use of soybean oil in biofuel production. According to USDA forecasts, consumption of soybean oil for biofuels is expected to reach 17.8 bln pounds in MY 2026/27, compared with 14.8 bln pounds in the previous season, representing an increase of approximately 20%. Renewable diesel and biodiesel producers are expanding their use of vegetable oil feedstocks, competing for available supplies with traditional soybean oil consumers.

The impact could be particularly significant for the oleochemical industry, which uses vegetable oils to produce fatty acids, including oleic acid. Oleic acid is used in the manufacture of cosmetics, soaps, detergents, lubricants and other chemical products. Reduced soybean oil availability could increase feedstock procurement costs for these manufacturers, although the impact on final product prices will depend on processing costs, feedstock substitution options and the availability of alternative vegetable oils and fats.

Further market developments will depend on the recovery of soybean crushing activity and demand trends in the biofuel sector. Higher capacity utilization at crushing plants following seasonal maintenance and the arrival of the new crop could partially improve soybean oil supplies. However, if biofuel production continues to expand faster than feedstock availability, competition among the energy, food and oleochemical industries will intensify, putting additional pressure on prices and costs for industrial consumers.

IC UAC acording to ukragroconsult [2]