Soybean crushing margins on the Chicago Board of Trade (CBOT) slipped below $3/bushel (bu) on Tuesday for the first time in nearly three months, falling by 31pc from a record high in early June.
Across July-delivered CBOT soybean, soybean meal, and soybean oil contracts crushing margins fell to $2.88/bu as of 30 June, the lowest for front month margins on CBOT since 9 April and down from a record $4.18/bu on 3 June.
Margins have come under pressure from lower soybean meal values, which have fallen by 5pc since 3 June to settle to $304.70/short ton (st) as of 30 June. But most of the downward pressure has come from falling soybean oil values, which have fallen by 16pc to $0.67/lb from a 1 June peak of $0.79/lb.
Soybean futures have fallen as well, down by 3.2pc from the 3 June crushing margins peak to $11.17/bu as of Tuesday's settlement. But the weight of falling soybean oil values was more than enough to pull crushing margins lower.
Short-term struggle
Soybean crushing margins have fallen in recent weeks as soybean oil prices followed crude oil lower, while imports of other feedstocks have added supply pressure.
The US and Iran have continued to work towards resolving their conflict and restoring global crude oil flows — despite some setbacks — with global crude oil prices trending lower as a result.
Rebounding imports of tallow and used cooking oil since the start of 2026 have also weighed on demand for domestic feedstocks. Favorable import economics kept the feedstock arbitrage widely open through the first half of the year, prompting renewable diesel producers, particularly in coastal markets, to secure large volumes of waste-based feedstocks.
Domestic feedstock prices initially continued to rise, as imported cargoes typically take several months to reach US ports. Those volumes are now beginning to arrive, increasing feedstock availability and creating congestion in some key demand centers, while storage tanks are filling.
The outlook for imports during the remainder of the year may hinge on trade policy. President Donald Trump is expected to finalize new tariff measures in late July, when the temporary 10pc global tariff framework expires, a decision that could significantly influence feedstock import flows for the balance of 2026.
A comeback in the making?
While soybean crush margins face several near-term headwinds, how much lower they can fall remains a question.
US demand for soybean oil is still expected to grow throughout this year as biofuel producers work to fulfill expanded US renewable fuel blending obligations and capitalize on a recently adjusted 45Z biofuel producers tax credit that heavily favors the use of domestic biofuel feedstocks.
US soybean oil consumption for biofuel production reached a record 1.28bn lbs in March, up 54pc from a year earlier, underscoring strong demand from the sector. The US has set biomass-based diesel mandates for 2026 at 5.53bn USG, including volumes reallocated from small refinery exemptions, raising the overall requirement by 65pc from 2025 levels. Domestic renewable diesel plants are operating at near-maximum capacity to meet the higher mandates, as reflected in stronger generation of biomass-based diesel (D4) Renewable Identification Numbers (RINs) in May, according to the US Environmental Protection Agency. D4 RIN generation totaled 736mn credits in May, up 22pc from the same month a year earlier.
Soybean prices could also struggle in the months ahead. The US Department of Agriculture this week revised up its US soybean planted area estimate for 2026, and the outlook for this year's soybean yields remains positive. Export demand for the 2026-27 marketing year has started to build, but with a limited outlook following the US and China trade agreement in October of last year it is not clear that foreign demand will add sufficient support to push crushing margins lower should increased soybean oil demand begin to lift crushing margins again.
If soybean crushing margins come under additional pressure, they would still have ample room to move lower before it would curtail the record crushing rates seen in the US during recent months. From 2021 through 2025 US soybean crush margins averaged $1.51/bu, leaving plenty of room for lower returns to drive crushing volumes.
