The Chicago soybean complex firmed on Friday as crude oil prices rose, and was on track for weekly gains as Chinese buying and lower yield forecast provided support.
The September soybean contract on the Chicago Board of Trade rose 0.84% to $11.76 per bushel in early trade, bringing weekly gains to 1.45%. The September CBOT soybean oil contract inched up 0.26% to 68.97 cents per pound, with weekly gains at 1.08%.
The US Department of Agriculture on Thursday reported that private exporters sold 125,000 metric tons of soybeans to China, following earlier sales this week of 244,000 mt and 136,000 mt.
The agency also lowered its US soybean yield estimate for the 2026/27 marketing year to 52.7 bushels per acre, versus the July forecast of 53 bushels and market expectation of 52.9 bushels.
Above factors supported prices, despite an increase in production forecast by 44 million bushels to a record 4.52 billion bushels due to a larger harvested area.
Favorable rainfall and weather conditions in the coming weeks could also improve crop growing conditions and yield prospects.
In South America, production forecasts were lower, with Brazil's National Supply Co., Conab, revising its 2025/26 output downward by 100,000 mt to 180.5 million metric tons, in line with the USDA estimate.
The Argentinian output projection by the Buenos Aires Grain Exchange for the 2026/27 season reportedly came in at 48 mmt, below the USDA estimate of 50 mmt.
In Asia, Malaysian palm oil futures closed lower on Friday, diverging from soybean oil and crude oil, but posted weekly gains of around 0.7% driven by strong export demand, particularly from India.
The Bursa Malaysia Derivatives' September crude palm oil contract dipped 0.69% to 4,576 Malaysian ringgit ($1,118.64) per metric ton. The October contract slipped 0.30% to 4,710 ringgit/mt.
Malaysia emerged as the top supplier of palm oil to India during the first nine months of the 2025/26 marketing year, followed by Indonesia, The Hindu Business Line reported, citing data from Solvent Extractors' Association of India.
In July, India's palm oil imports reportedly reached their highest in five months at 730,965 metric tons, as purchases grew 50% from the June level. Coupled with higher soybean oil purchases, the country's total edible oil imports reached their highest since September 2025 at about 1.5 mmt.
Upcoming festivities in India are currently lifting demand, with palm oil purchases likely to sustain a strong momentum in August at above 700,000 mt, according to Sunvin chief executive Sandeep Bajoria, as cited by Reuters.
This will boost Malaysia's shipments, which have so far risen in the first 10 days of August by 2.6% to 14.8% from a month earlier, according to cargo surveyor estimates. In June and July, exports grew 7.2% and 14.5% month-over-month, respectively.
For September, palm oil reference prices will be lower while export duty will be maintained at 10%, according to a circular by the Malaysian Palm Oil Board.
This "will reduce export costs and enhance the competitiveness of its supplies in the international market," market intelligence provider SunSirs said. "This move reinforces expectations of ample supply, exerting generally bearish pressure on both spot and futures prices for palm oil."
Going forward, weather-related supply risks and progress in Indonesia's higher 50% biodiesel blending mandate will underpin fundamentals and support prices.
In the US, September ethanol prices on the NYMEX eased 0.50% to about $1.98 per gallon on Thursday, as the market reacted to recent inventory buildup due to higher production and lower exports.