US soybean crush hits 222 million bushels in July as diesel sets $5.90 record

The USDA says processors crushed 222 million bushels of soybeans in July, 4 million more than June and 17 million above the same month a year ago. That beat what the trade was looking for. For anyone moving biodiesel or renewable diesel, it says the crush plants are running hard and pulling more bean oil toward the fuel pool.

The crush run

Margins are the reason. Brownfield reports processors kept crushing through July because the spread between beans in and meal-plus-oil out stayed bullish, and product kept moving. When crush margins are good, plants run flat out, and soybean oil is the main feedstock for biodiesel and a big share of renewable diesel. More oil into fuel tightens the vegetable oil balance for the other buyers bidding on it.

Ethanol output held up too, which keeps corn demand elevated on the other side of the barn. Firm ethanol production plus firm crush means the grain complex is leaning hard on fuel demand right now, not just food and export.

Diesel at $5.90

AAA put the national average diesel price at $5.9015 on Monday, a record, up about 30 cents in a week. The cause is supply: damage to Gulf Coast refineries during the war against Iran has cut runs and disrupted tanker traffic through the Strait of Hormuz.

For renewable diesel producers, a diesel record is a tailwind. RD sells against the diesel rack, so when petroleum diesel is this expensive, every renewable gallon is worth more before you even count the credits. The same $5.90 that squeezes your hauling customers widens the margin for the plants competing with soybean oil for feedstock. That pull is part of why crush stayed strong.

Sunoil in Belgium

Dutch producer Sunoil Biodiesel won regulatory approval to sell its waste-based biodiesel in Belgium. On its own, a Belgian market entry does not move a US rack. It matters here only for feedstock: European producers buy used cooking oil and other waste fats from the same global pool US renewable diesel plants depend on, and every new EU outlet for waste-based fuel adds a bidder. If that keeps up, US feedstock costs could firm.

What to watch

Whether the August crush number holds near July's pace, which would keep soybean oil bid up. RIN values, since a tight oil balance and record diesel usually push renewable credits higher. And the Gulf refinery repairs: diesel could ease if runs come back and the strait stays open, which would take some of the premium out of renewable diesel too.