Diesel has turned US soybean oil into fuel first
Diesel has nearly doubled since February while soybean oil gained a sixth, so US biofuel plants are now paid many times what they earned last year to burn it. They are using it faster than a full crush can refill the tank.
Diesel in New York Harbor has nearly doubled since February, from an average of 2.50 $/gal that month to 4.90 last Friday, while soybean oil on the CBOT gained about a sixth. That gap has made burning soybean oil the best-paid thing a US buyer can do with it, and the biofuel plants are now taking it faster than the crushers can put it in tank.
Diesel did the work, not the oil
The gross margin for turning a tonne of soybean oil into biodiesel, RIN included, never averaged more than 96 $/t in any month from February 2025 to February 2026. It jumped to about 400 in March, when crude went from 73 to over 100 $/bbl in two weeks, and stood at 786 on 16 October. Since May it has doubled again, from both ends: diesel kept climbing while soybean oil slipped from 75 c/lb to 67.
The plants are burning it
Volume followed the margin. US biofuel plants used 0.39 to 0.48 Mt of soybean oil a month from September to February, then stepped up from March and reached 0.77 Mt in July, against 0.58 in July 2023. From September to July they used 5.93 Mt, nearly the 5.95 Mt of 2023/24's full twelve months.
The tank empties under a full crush
NOPA members crushed 5.34 Mt of soybeans in September, barely under last September's 5.38 and well above the four before it. Even so, they closed the month holding 0.478 Mt of oil, 9% of the tonnage crushed in the month, against 10 to 18% in the five previous Septembers. The tank has lost 0.47 Mt since February, where the fall from the spring peak ran 0.13 to 0.39 Mt in the four previous seasons. With nothing left over, the USDA expects US soybean oil exports of 0.18 Mt in 2026/27, against 1.13 two seasons ago.
Our reading: the winter rebuild is in question
The autumn crush normally refills the tank: NOPA stocks rose 0.16 to 0.38 Mt from September to February in each of the last five seasons. This year the plants drawing on it are paid more than in July, and at July's pace they would use around 0.3 Mt a month more than last winter, close to a whole normal rebuild every month. As long as diesel holds, our reading is that the US goes into 2027 without the oil cushion it usually builds over the winter. Three signals in our data will show how it resolves:
- NOPA's October stocks. October has moved the tank between a 5 kt draw and a 68 kt build over the last five seasons. A draw in the heaviest crush months would mean the harvest is not keeping up with the plants.
- EIA's August and September use. Plants holding near July's 0.77 Mt would confirm the margin is still turning into volume. A slide back toward last winter's 0.4 to 0.5 Mt would mean they have hit a ceiling the margin cannot lift.
- The biodiesel margin. Diesel carries it far more than the RIN does. A retreat in diesel would narrow it from the top, and the pull on the oil would ease with it.
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