The rush to expand and construct new soybean crushing facilities in 2022 to meet renewable fuel demand will be a crucial driver of the soybean market in the new year. Since this last summer, at least seven new or expanding soybean crush plants have been announced. Rising demand for renewable fuels could increase the floor for soybean and corn prices by at least $3 and $2 per bushel. This new dimension for soybean demand is approaching levels never seen before.
The new crush capacity is expected to add 564 million bushels by 2026. According to the U.S. Energy Information Administration, renewable diesel production has nearly doubled from 971 million gallons per year in 2021 to 1.92 billion in 2022. Refiners are acting quickly to take advantage of the rapidly growing demand for sustainable fuel and to cash in on lucrative federal and state tax credits. The federal Renewable Fuel Standard (RFS), bolstered by welcomed volume obligations announced earlier this year, is also driving excitement for the business opportunity.
Read more on soybean demand and renewable diesel capacity here.
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