Soybean oil’s share in US biofuel production reaches a record high

US biofuel producers consumed a record amount of soybean oil in May despite falling futures prices and ongoing uncertainty over federal renewable fuel policy. According to data released by the US Energy Information Administration (EIA), soybean oil strengthened its position as the dominant feedstock for the country’s biofuels sector.

In May, US biofuel producers used 1.43 bln lbs of soybean oil, up 17% from April. Renewable diesel producers accounted for 687 mln lbs (+28% month on month), while biodiesel manufacturers consumed another 747 million lbs (+9%). As a result, soybean oil represented more than 39% of the total US biofuel feedstock pool, up from 36% a month earlier.

Consumption of other feedstocks also increased. Used cooking oil demand rose 28% to 605 mln lbs, the highest level since October 2024. Meanwhile, tallow consumption climbed by more than 20% to 796 million lbs, accounting for nearly 22% of all feedstocks used by the US biofuels industry.

Despite record physical demand, soybean oil futures remain under pressure. The September contract on the CME lost more than 8% over the week as traders weighed the potential expansion of Small Refinery Exemptions (SREs), which could reduce renewable fuel blending requirements and weaken future demand for soybean oil.

Analysts say the market is currently showing a disconnect between strong physical consumption and financial market sentiment. While feedstock demand continues to rise following higher renewable fuel blending mandates and updates to the 45Z Clean Fuel Production Credit, traders remain more focused on regulatory uncertainty than on record-high underlying demand.

Tags: soybean oil, USA, biofuel