Major biofuel feedstocks were mixed on Tuesday, as the Chicago soybean complex eased on ample supply availability, while Malaysian palm oil firmed following a rise in crude oil prices.
The July soybean contract on the Chicago Board of Trade edged lower by 0.48% to $11.91 per bushel in early trade, and the July soybean oil contract inched down 0.31% to 73.75 cents per pound.
South American supply in the global market is expected to increase as Brazil's soybean harvest concluded, according to price reporting agency MySteel.
Brazilian soybean exports are projected at 16.1 million metric tons in May, up versus 14.2 mmt a year earlier, based on estimates by trade association Anec.
In Argentina, the government may reportedly cut soybean export duties from January 2027, subject to tax revenues and continuation of the current administration. Export duties for wheat and barley will be reduced to 5.5% from 7.5% beginning in June.
In the US, progress in soybean planting remained higher at 67% through the week ended May 17, compared with last year's pace of 63% and the five-year average of 53%. Updated data will be released by the agriculture department on Tuesday.
With these factors buoying global supplies, MySteel expects Chicago soybeans "to trade in a range-bound pattern between $11.70 per bushel and $12.10 per bushel."
In Asia, Malaysian palm oil futures tracked gains in crude oil prices following US military strikes on Iran, but slowing exports partially offset increases.
The Bursa Malaysia Derivatives' June crude palm oil contract recovered 0.43% to 4,429 Malaysian ringgit ($1,119.71) per metric ton on Tuesday. The July palm oil contract rose 0.45% to 4,466 ringgit/mt.
Indonesia's move to centralize exports of palm oil and other commodities to a state-backed agency, which is planned for implementation beginning September, may provide a temporary boost to Malaysia's export market, hence supporting prices.
"Crude oil and geopolitical risks, together with Indonesia's export policy, were the core variables driving (vegetable) oil price increases," MySteel said.
The new export policy could further reduce Indonesian shipments of palm oil, which have already seen a drop in March to 2.17 million metric tons from 2.88 mmt a year earlier, according to industry association data, cited by Trading Economics.
Indonesian Palm Oil Association chairman Eddy Martono, as cited by Jakarta Globe, cautioned that the new system, if not managed properly, may disrupt long-established export markets and trading networks.
Uncertainties in export mechanisms have also impacted farmers, as palm oil fresh fruit bunch prices fell to around 1,000 Indonesian rupiah ($0.06) per kilogram from 2,800 rupiah/kg, after traders, mills, and companies withheld purchases and temporarily halted sales, according to a palm oil farmer association cited by Reuters.
The government reportedly argued that the centralized system will enhance oversight of shipments, preventing state revenue leakages of around $150 billion annually.
In Malaysia, declining Malaysian shipments weighed on prices, after cargo surveyors reportedly estimated a 14.5% to 18.0% month-over-month decline in export volumes for the May 1-25 period.
A possible US-Iran peace deal could pressure palm oil prices going forward due to decreasing appeal of biofuels, Phillip Capital said.
The market will be closed on Wednesday for Eid holiday.
In the US, ethanol prices also rose, with June contract on the NYMEX up 0.74% to about $2.04 per gallon on Friday.