US soybean oil use in biofuel production falls 17% as canola oil consumption rises

US biofuel producers significantly reduced soybean oil consumption in August 2026, while canola oil use increased. According to data released by the US Energy Information Administration (EIA) on October 30, soybean oil consumption declined by 17% month-on-month, from 1.69 bln lb to 1.40 bln lb (approximately 635 thsd tons). Meanwhile, canola oil consumption rose by 15.5% to 381 mln lb (around 173 thsd tons).

The sharpest decline in soybean oil demand was recorded among renewable diesel producers. They consumed 625 mln lb of soybean oil in August, compared with 871 mln lb in July, representing a decrease of 28.2%. By comparison, conventional biodiesel producers reduced their soybean oil consumption by just 5%. Meanwhile, canola oil consumption by renewable diesel facilities increased by nearly 30%.

Demand also weakened for other biofuel feedstocks. Tallow consumption fell by 33.7%, from 771 mln lb to 511 mln lb, while corn oil use declined by 17.7% to 373 mln lb. Meanwhile, consumption of yellow grease, a category that includes used cooking oil, remained virtually unchanged at 607 mln lb.

The decline in consumption coincided with substantial imports of biofuel feedstocks. In August, the US imported 266.15 thsd tons of waste oils, down 21% from July but 62% higher year-on-year. Imports of inedible tallow totaled 113.3 thsd tons. High import volumes amid weaker demand contributed to inventory accumulation and continued to weigh on domestic prices throughout October.

Meanwhile, US market participants expect a gradual recovery in biofuel feedstock purchases in late 2026 and early 2027. Demand could be supported by federal renewable fuel obligations and favorable renewable diesel production economics. According to Fastmarkets, used cooking oil prices delivered to the US Gulf Coast stood at around 71 cents/lb in late October, while January deliveries were discussed at a premium of 1–2 cents/lb. However, the timing and extent of any demand recovery remain uncertain due to substantial feedstock inventories.

Tags: soybean oil, USA, rapeseed oil, biofuel