Higher crude oil prices helped Chicago soybean oil recover on Tuesday, but failed to lift Malaysian palm oil as weaker market fundamentals dragged prices down.
In early trade, the July soybean oil contract on the Chicago Board of Trade rebounded 0.99% to 74.47 cents per pound.
The July soybean contract gained for a third consecutive session by 0.37% to $12.17 per bushel, as the market awaited the Trump-Xi summit and the latest agricultural supply and demand outlook.
Market participants have been hoping China will confirm additional purchases of US soybeans, as the two leaders meet on May 14 and 15.
Meanwhile, the US Agriculture Department is expected to raise its production outlook for 2026 due to higher planted acreage, according to analysts. The May outlook typically sets the tone for the new crop year.
In terms of exports, data for the current marketing year through May 7 showed US soybean inspections totaled 34.0 million metric tons, down from the previous season's 43.9 mmt. Weekly inspections however rose to 655,294 metric tons, relative to the previous week's 505,468 mt and the prior year's 439,814 mt.
In Asia, weaker market fundamentals offset the influence of rising crude oil and rival soybean oil to weigh on Malaysian palm oil futures on Tuesday.
The Bursa Malaysia Derivatives' June crude palm oil contract declined 0.76% to 4,450 Malaysian ringgit ($1,128.88) per metric ton, and the July contract slipped 0.78% to 4,481 ringgit/mt.
Lower exports and higher production in April, which lifted domestic stocks, pressured prices. Malaysia's exports declined 14.3% from a month earlier to 1.3 mmt, as production jumped 18.4% to 1.6 mmt, industry data showed.
At the same time, Malaysian inventories rose 1.7% month over month to 2.31 mmt, and remained significantly higher than the year-ago levels of 1.87 mmt.
In May, export demand trends were mixed, with Intertek Testing Services estimating shipments to have risen 8.5% during the first 10 days of the month versus the same period in April, and AmSpec Agri Malaysia seeing a 10.8% decline, Trading Economics reported.
A weaker local currency could boost export competitiveness, particularly with the Malaysian ringgit edging lower by another 0.35% against the US dollar on Tuesday.
Going forward, expectations of increased domestic demand in Malaysia and Indonesia, with the implementation of higher biofuel mandates, are likely to support prices.
For this week, PhillipCapital said prices are likely to be "rangebound, due to stronger Chicago soybean oil and crude oil prices, supported by improving export data and a weaker ringgit."
Meanwhile, in the US, June ethanol prices on the NYMEX steadied at $1.93 per gallon on Monday.
This week, the US House is set to vote on a legislation to allow year-round sales of E15, a gasoline blended with 15% ethanol.
That would raise domestic consumption of corn by about 500 million bushels for every percentage point increase in ethanol blending, Brownfield reported, citing Jan TenBensel, chairman of the Nebraska Ethanol Board. The standard ethanol blend in the country currently stands at 10%.