News
08/05/26
US soy crush margins soar, set to remain high
US soy crush margins soar, set to remain high
Houston, 8 May (Argus) — High soybean oil and meal prices have driven US soybean
crush margins to record levels in recent weeks, a trend likely to continue as
crushing capacity appears to have reached its limit. Soybean crush margins on
the Chicago Board of Trade (CBOT) — which averaged $1.51/bushel (bu) in 2021-25
— surged to $3.76/bu on 5 May from $2.11/bu on 27 February, supported by rising
soybean oil values, which have gained 23pc since the start of the Middle East
war. Gains in soybean oil and meal prices outstripped those recorded on soybean
futures, in turn widening the CBOT soybean crush margin. This disconnect
suggests US crushers have reached their soybean demand limit. US soybean
crushing set a record in March, reaching 92pc of capacity, according to Argus
estimates, leaving little room to increase soybean use despite attractive
margins. As a result, US soybean oil and meal outputs may have reached a
near-term ceiling. The limited spare crushing capacity would also cap soybean
crushing demand, dampening the pass-through of crusher margins to soybean
prices. For margins to revert to normal levels soon, soybean meal and oil prices
would need to fall on weaker demand or soybean prices would have to rise on
stronger exports — scenarios which face obstacles. Soybean oil demand hits a new
level Higher energy costs stemming from the war and updates to US biofuels
policies have supported — and will likely continue to bolster — US soybean oil
prices. Even if the conflict were to end today, repairing Mideast Gulf
infrastructure and restoring trade flows to pre-war levels would take time. And
US demand for soybean oil is expected to rise as biofuel producers meet higher
blending mandates for 2026 and 2027 , with additional support from the 45Z tax
credit, which is limited to North American feedstocks. US soybean oil
consumption reached a record 1.22mn t in March, 658,000t of which went to the
biofuels sector , up by 74pc on the year, according to Argus estimates. This was
the first time since August 2024 that biofuel use accounted for more than half
of total soybean oil demand. This share is likely to grow as export demand has
already shifted away from the US market. To meet proposed renewable volume
obligation (RVO) targets for 2026, an average of 685,000t of soybean oil per
month would need to go to the biofuels sector for the rest of 2026, Argus
estimates show. Domestic non-biofuel use has been mostly steady at
546,000t/month since early 2026. But with US soybean oil output capped sy around
1.2mn t/month, supplying both markets leaves little room for additional demand.
Soybean meal in demand, at home and abroad Strong demand is also supporting US
soybean meal prices despite record output from higher soybean crushing. Total
soybean meal use — combining exports and domestic consumption — has held at
record levels and exceeded production in five of the first six months of the
2025-26 marketing year, which began on 1 October. The strength of US soybean
meal export demand has come from multiple buyers, with sales to most trade
partners up by 10pc or more on the year. Domestic use has also reached record
levels, supported by expanding US poultry and pork production. Domestic
consumption through March of the 2025-26 marketing year was up by 1.57mn t from
a year earlier. As a result, stocks have stayed mostly below last year,
providing support for prices. With soybean harvests in Brazil forecast to reach
record levels this year, export demand could weaken, thereby pressuring prices.
Limited upside for soybeans A rise in soybean prices, which could narrow crush
margins, seems unlikely given the crop's current fundamentals. Strong crush
boosted domestic soybean use by 3.33mn t through March of the 2025-26 marketing
year from a year prior. US crushing facilities can process at most 71mn t a year
— given daily capacity of 217,000t and allowing for maintenance closures — up
about 5mn t from 2024-25. And export demand for US soybeans has declined
following last year's US-China trade dispute. Export sales fell by 8.7mn t
through April of 2025-26 from a year earlier, the lowest level for that point in
the year since 2013. As a result, May began with 38.8mn t of soybeans in storage
across the US, up by 3.5mn t on the year, according to Argus estimates. Should
farmers plant more soybeans this year to avoid the higher nitrogen fertilizer
costs tied to corn production , a large US soybean harvest would carry the
domestic surplus into 2026-27. The US Department of Agriculture projected on 31
March that US farmers will plant 3.5mn acres more soybeans than in 2025, based
on surveys conducted before fertilizer prices rose due to the war. The agency
will update its acreage projection on 30 June. If farmers have shifted even more
acreage into soybeans, prospects for soybean price support will dim further —
and the outlook for strong crusher margins will strengthen. By Joseph Crosby and
Ryan Koory US soy products supply and use mn t MYTD* MYTD* Change from prior
year MYTD* % Change Soybeans Crushed 42.49 3.33 8.5% Exported 30.61 -11.32
-27.0% Soybean meal Produced 27.30 2.10 8.3% Domestic use 18.61 1.57 9.2%
Exported 9.04 0.72 8.6% Soybean oil Crude oil produced 7.11 0.37 5.5% Domestic
use 6.50 0.61 10.3% -Biofuel use 2.85 0.28 11.0% -non-Biofule use 3.65 0.33 9.8%
Exported 0.36 -0.41 -53.3% * Through March of MY beginning Sep for soybeans, Oct
for meal and oil — Argus Media, USDA CBOT Soybean prices and crush margins
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