Ethanol futures rebounded on Thursday following a jump in exports, while soybean oil and palm oil slipped toward the end of the week despite strong crude oil prices boosting biofuel economics.
The Nymex November ethanol futures contract closed 1.25% higher on Thursday at $2.03 per gallon.
Data from the US Energy Information Administration showed that the US exported 147,000 barrels per day of ethanol in the week ended Sep. 4, up from the previous week's 104,000 b/d and the prior year's 121,000 b/d.
Domestic production saw a slight moderation week over week to 1.10 million barrels per day from 1.11 mmbbls/d, while ending stocks rose to 25.2 million barrels from 25.0 mmbbls.
In the US, ethanol blending in gasoline has provided a cost advantage during Middle East tensions, with E10 savings averaging 38 cents per gallon so far, according to a study by the Renewable Fuels Association.
"As global petroleum stocks continue to tighten, American-made ethanol is extending domestic fuel supplies by more than 1 million barrels per day and significantly lowering prices at the pump for consumers," RFA president and chief executive Geoff Cooper said.
As for soybean oil, the October contract on the Chicago Board of Trade dipped 1.60% to 70.27 cents per pound in Friday's early trade. It remained on track for a weekly rise of around 2%, driven by crude oil gains.
The raw material soybeans also saw a drop on Friday, with the Chicago November contract slipping from the previous session's contract-highs by 1.01% to $13.19 per bushel.
Strong Chinese demand has pushed prices above the $13-mark, as this week's purchase reached 1 million metric tons, according to traders cited by Reuters. China's US soybean imports have reportedly reached half of the 25 million metric ton pledge, ahead of the US-China summit later this month.
In key producer Brazil, soybean exports this month are estimated at 7.7 mmt, up from 7.0 mmt a year earlier, data from the National Association of Cereal Exporters, Anec, showed.
In Asia, Malaysian palm oil futures retreated for a fourth consecutive session on Friday, with weekly losses exceeding 2%, due to ample supply and weak exports.
The Bursa Malaysia Derivatives' October crude palm oil contract eased by a further 0.98% to 4,670 Malaysian ringgit ($1,154.66) per metric ton. The November contract lost 1.45% to 4,814 ringgit/mt. Both contracts tracked losses in rival soybean oil.
Malaysian inventories of palm oil, a key biodiesel feedstock, rose to an eight-month high of 2.8 mmt in August as production grew 1.4% from a month earlier to 1.8 mmt, while exports dropped 7.5% to 1.3 mmt, according to Malaysian Palm Oil Board data.
Shipments in September have so far remained slow, with cargo surveyors reportedly estimating exports in the first 10 days of the month to have dropped between 11.7% and 17.5% from the same period in August.
Nonetheless, improving biofuel economics, with Brent crude prices rising above $100 per barrel due to Middle East tensions, provided support.
In Indonesia, where a higher 50% biodiesel blend, or B50, is set for full implementation in October, lower palm oil prices compared with gas oil are expected to reduce the subsidy burden of the new biofuel mandate, New Straits Times reported, citing CIMB Securities.
The country is also considering increasing its biodiesel blend further to 60% next year.
The investment bank reportedly projects palm oil prices to trade between 4,400 ringgit/mt and 4,600 ringgit/mt in the near term, amid higher biofuel margins and prospects of lower output in 2027 due to the El Nino weather phenomenon.