The Chicago soybean complex traded lower on Thursday ahead of the US Department of Agriculture's supply and demand report, while Malaysian palm oil firmed as exports recovered.
The July soybean contract on the Chicago Board of Trade eased 0.22% to $11.20 per bushel. The July soybean oil contract dropped 0.29% to 75.11 cents per pound in early trade.
Prices also tracked declines in crude oil prices and reflected bearish sentiments due to the rapid pace of US soybean planting and ample supply availability in South America.
Argentina's Rosario grain exchange reportedly raised its production forecast for the current season to 51.5 million metric tons, versus the previous outlook of 50 mmt, citing better-than-expected yields.
Brazil's National Association of Grain Exporters, Anec, revised its export projections for June by 2 mmt to 14.4 mmt, which would be a record high for the month if realized, according to ADM Investor Services.
The market is keeping a close eye on USDA's supply and demand report, which analysts cited by Reuters expect to show a rise in Brazilian and Argentine production outlooks.
Traders also await China's large purchases of US soybeans, following last month's summit between the two countries.
China's soybean imports reportedly slipped 15.3% year over year to 11.8 mmt in May, according to customs data cited by Reuters, although figures came in above market expectations of around 11 mmt.
From January through May, the country reportedly purchased 36.9 mmt of soybeans, down around 0.4% from 37.1 mmt imported a year earlier.
In Asia, Malaysian palm oil futures rose on Thursday as initial export estimates showed a recovery during the first 10 days of June.
The Bursa Malaysia Derivatives' July crude palm oil contract inched up 0.24% to 4,509 Malaysian ringgit ($1,107.89) per metric ton. The August contract gained 0.29% to 4,551 ringgit/mt.
Cargo surveyors reportedly estimated Malaysian shipments for the period June 1-10 to have rebounded between 3.5% and 4.9% from a month earlier. In May, exports softened 14.5% versus April levels to 1.1 mmt, according to Malaysian Palm Oil Board data.
However, gains were capped as stocks remained high at 1.28 mmt last month, up from April's 1.26 mmt and the previous year's 1.10 mmt.
Elevated inventory levels, nonetheless, support Malaysia's higher biodiesel blend mandate of 15% introduced this month.
The enhanced biofuel policy, which is up versus the previous 10%, is unlikely to significantly affect the country's exportable supplies, according to analysts.
Malaysia produces around 20 mmt of palm oil annually and uses only 3 mmt itself, leaving around 17 mmt of palm oil supply, either for export or more higher domestic use, CGTN News reported, citing Malaysian Biodiesel Association president Tee Lip Teng.
In Indonesia, shipments in the near term may rise as exporters rush to sell cargoes prior to the full implementation of the new single-gate export policy next year.
This could intensify competition with Malaysian exports, as Indian and Chinese buyers turn to Indonesia for cheaper supplies, Business Today reported.
In China, favorable margins on imported product are prompting buyers to secure palm oil cargoes despite domestic inventories at three-year highs, price reporting agency MySteel said.
In the US, July ethanol prices on the NYMEX declined for a third straight session by a further 0.79% to about $1.90 per gallon on Wednesday, as weekly domestic production steadied while exports picked up.
For the week ended June 5, data from the US Energy Information Administration showed ethanol output was unchanged at 1.1 million barrels per day.
Exports grew week over week to 155,000 barrels per day from 135,000 b/d, reducing inventories to 24.4 million barrels from the previous week's level of 24.6 mmbbls.