Ethanol futures rallied this week on higher exports and steady production, while soybean oil slipped in line with crude oil price moderation.
The Nymex November ethanol futures contract resumed its upward trend, rising 0.84% to $2.09 per gallon on Thursday after steadying in the previous session.
US ethanol exports in the week ended Sep. 11 grew to 161,000 barrels per day from 147,000 b/d a week earlier, according to the US Energy Information Administration. Domestic output remained unchanged at 1.1 million barrels per day during the period.
Strong export demand for ethanol is supporting prices for raw material corn, according to Craig Turner of Stone X, as cited by Ag Web.
The advancement of the proposed farm bill to the US Senate also provided some upside, as the legislation includes a provision for year-round sales of E15.
In Friday's early trade, the October soybean oil contract on the Chicago Board of Trade eased for a third straight session, dropping by a further 0.42% to 68.39 cents per pound as crude oil prices dipped. The contract was on track for a weekly loss of more than 1%.
For soybeans, the raw material for soybean oil, the November CBOT contract was down 0.87% to $13.08 per bushel on Friday, but was headed for a weekly gain of about 0.9%. Traders remained optimistic about sustained Chinese demand, with the US-China summit scheduled next week.
At the same time, prices for soybean meal, another product from soybean crushing, recently reached contract highs and diverged from soybean oil.
"Prices are sharply mixed with meal/oil spreading dominating trade within the complex," ADM analyst Mark Soderberg said. Strong soybean meal prices could support the entire soybean complex.
The US Department of Agriculture reported that soybean oil exports totaled 2,200 metric tons in the week ended Sep. 10, up 52% from the prior four-week average.
"In the short term, soybean oil is expected to fluctuate in line with the US soybean futures market," price reporting agency MySteel said, noting that "key factors to monitor include US soybean harvest progress, oil mill inventories, and the pace of end-user pickups."
In Asia, Malaysian palm oil futures retreated on Friday tracking losses in crude oil and soybean oil, although weekly gains were recorded as strong Indian demand and Indonesia's B50 roll-out lifted sentiment.
The Bursa Malaysia Derivatives' October crude palm oil contract closed lower by 0.30% to 4,698 Malaysian ringgit ($1,154.64) per metric ton. The November contract was down 0.66% to 4,800 ringgit/mt.
"Since late August, the Malaysian palm oil market has continued the pattern of strong supply and weak demand," market intelligence provider SunSirs said.
Malaysian shipments of palm oil, a key biodiesel feedstock, reportedly declined by 17.8% to 25.6% in the first half of September relative to month-ago levels.
While restocking in India ahead of festivities lent support, future purchases are expected to be constrained by available storage capacity and the price spread between soybean oil and palm oil, according to the firm. India's palm oil imports reportedly rose to a six-month high of 782,761 metric tons in August.
Slow exports and high seasonal production have lifted Malaysian inventories for a fifth consecutive month in August.
In Indonesia, stocks are lower than Malaysia's, although there could be a near-term buildup as oil palms remain in a seasonal production cycle and the impact of forest fires on production may not be significant, SunSirs noted.
"Some palm planting areas in Indonesia have been hit by fires, but the fires did not affect the core producing areas, nor did they cause large-scale damage to palm trees. The impact on the current output is weak, and it is more of a pulsed positive factor," SunSirs said.
Earlier, StoneX analyst Cheang Kang Wei told Reuters that output from Kalimantan, a major producing region in Indonesia, could drop by 12% to 15% in Q4, while the Indonesian Palm Oil Association, Gapki, revised down its 2026 national production forecast by 2.9% to 56.8 million metric tons.
The market is likely to maintain near-term weakness before gradually strengthening as El-Nino driven supply risks and rising biofuel consumption in Indonesia provide upward momentum.
"The impact of El Nino is still in the distant medium and long term, and short-term supply pressure remains... However, in the medium term, supported by expectations of a decline in palm fruit production and the implementation of Indonesia's B50 policy, palm oil prices have room for upside," SunSirs said.