Biofuels reshape the balance between soybean oil and meal in soybean processing

Biofuels are changing the traditional economics of soybean processing, increasing the role of soybean oil relative to meal. According to data from the Chicago Board of Trade (CBOT), the soybean oil-to-soybean price ratio has risen to 0.055, the highest level in 55 years of recorded history. Meanwhile, the soybean meal-to-soybean price ratio has fallen to 0.30, near the lower end of its historical range.

The main driver of this shift is growing demand for soybean oil from the biofuels sector. The U.S. biodiesel mandate for 2026 has been set at 9.07 billion gallons, nearly 70% above the 2025 level. U.S. soybean oil consumption for biofuel production could approach 18 billion pounds this year, supporting oil prices and reducing volumes available for export.

The trend is also affecting the global vegetable oil market. Indonesia’s B50 program, which took effect in July, could remove 15–16 mln tonnes of palm oil from the export market each year. Additional support for soybean oil comes from declining sunflower oil exports from Ukraine and Russia, as well as record soybean oil purchases by India in August.

In Brazil, tightening soybean availability is also putting pressure on processors. Soybean prices at ports exceeded R$160 per 60-kg bag in August, while crush margins in Mato Grosso fell nearly 12% to R$383 per tonne, the lowest August level in three years. About 85% of the crop has already been marketed, making it increasingly difficult for processors to secure raw material.

Against this backdrop, tighter soybean availability could limit production of both soybean oil and meal in the coming months, while demand for oil from the biofuels sector remains strong. This is changing the traditional balance between the two main soybean processing products and increasing the importance of oil in determining processor profitability.

Tags: margin, soybean oil, prices, soybean meal