Major biofuel feedstocks rose on Monday, driven by improving demand sentiment and favorable economics from higher crude oil prices.
The August soybean contract on the Chicago Board of Trade climbed 1.41% to $12.21 per bushel. The corresponding August soybean oil contract gained 0.44% to 75.14 cents per pound.
Intensified attacks between the US and Iran buoyed crude oil prices, supporting competitiveness of biofuels over fossil fuels due to more favorable economics.
A series of soybean purchases by China, as reported by the US Department of Agriculture, also supported the soybean complex. Another 340,000 tons were sold to China on Friday, for delivery during the 2026/27 marketing year.
China's soybean imports reached a record 13.6 million tons in June, according to media reports. Purchases from Brazil grew 13.7% year over year to 12.1 mmt, more than offsetting the 20.6% decline in US imports to 1.27 mmt.
US cargoes for delivery through November are offered at $0.05 to $0.20 premium to Brazilian cargoes, ADM Investor Services said.
Going forward, weather patterns for August remain a key driver for future price movement, according to ADM analyst Mark Soderberg.
In Asia, Malaysian palm oil futures firmed on Monday along with crude oil and soybean oil, but gains were capped as high inventories in top producing countries persisted.
The Bursa Malaysia Derivatives' August crude palm oil contract rose 0.86% to 4,568 Malaysian ringgit ($1,116.30) per metric ton. The September contract edged higher by 0.94% to 4,608 ringgit/mt.
Higher Malaysian exports also supported palm oil prices, after cargo surveyors reportedly estimated a 4% to 12.4% month-over-month rise in July 1-15 shipments.
However, persisting high inventories in Malaysia and Indonesia pressured prices, underpinning the loose supply and demand fundamentals in the near term.
"Until the destocking trend in producing regions reverses, the structural pattern of range-bound fluctuations at lower levels will be difficult to fundamentally change," price reporting agency MySteel said.
RHB Research, as cited by Business Today, said that trading resistance levels remain significant, driven by a bearish market environment, despite a recent price upside.
"The market shows a clear divergence between near-term weakness and longer-term strength," according to MySteel.
Prices could receive some boost going forward amid prospects of tighter supply, due to potential yield impact from a developing El Nino weather phenomenon and expanding biofuel mandate in Indonesia.
Following the implementation of a higher 50% palm-based biodiesel blending in Indonesia on July 1, the country is expected to "completely" halt its diesel imports beginning this month, according to President Prabowo Subianto, as cited by Business Today.
Meanwhile, August ethanol prices on the NYMEX rebounded 0.26% to about $1.92 per gallon on Friday, in line with the price movement of global energy prices and other biofuel feedstocks.