The U.S. Department of Agriculture raised its 2025-26 U.S. soybean crush forecast by 15 million bushels to 2.57 billion bushels, in the January World Agricultural Supply and Demand Estimates report, citing stronger soybean meal disappearance and exports. At the same time, the agency lowered soybean oil demand for biofuel because more renewable diesel feedstock is being sourced from tallow, a shift that matters now because it reshapes the crush-driven balance between meal and oil. The pressure lands first on segments most exposed to oil/meal spreads: crush economics, renewable diesel feedstock procurement and commercial buyers of soybean meal.
In its latest World Agricultural Supply and Demand Estimates report, USDA tied the higher crush outlook directly to robust meal demand, pointing to both domestic disappearance and export strength. That framing signals USDA is leaning on meal-side pull to sustain higher processing volumes even as the biofuel call on soybean oil is revised down.
The biofuel revision reflects a feedstock substitution dynamic rather than a crush constraint. USDA said soybean oil demand for biofuel was reduced due to renewable diesel producers sourcing more feedstock from tallow, shifting incremental demand away from soybean oil and changing how the market prices the joint products coming out of the crush.
For meal markets, USDA’s narrative reinforces that disappearance and exports are doing the heavy lifting behind the higher crush forecast. That sets a supportive demand backdrop for feed buyers even as they monitor how weaker biofuel demand for soybean oil feeds back into oil/meal pricing relationships and crush margins.
What market participants are watching next is the exact size of USDA’s soybean oil biofuel demand cut, which is not quantified in the report’s summary language, and how subsequent WASDE tables and market data reflect the revised oil-versus-meal pull
