Major biofuel feedstocks eased heading toward the end of the week, with ethanol and palm oil extending losses driven by weaker demand fundamentals while soybean oil fell due to uncertainties around US-China tariffs.
The Nymex October ethanol futures contract edged lower by 0.46% to about $2.18 per gallon on Wednesday. Data from the US Energy Information Administration showed that exports in the week ended Sep. 18 declined to 122,000 barrels per day from 161,000 b/d a week earlier, as production dipped to 1.0 million barrels per day from 1.1 mmbbls/d.
The October soybean oil contract on the Chicago Board of Trade retreated for a third straight session by a further 0.34% to 67.02 cents per pound in early trade, as buyers awaited trade signals from the US-China summit.
"...(soybean oil) futures are fluctuating within a narrow range as the market awaits developments in China-US trade negotiations," market intelligence provider SunSirs said. Chinese buying could further increase if the 10% levy on US soybeans, the raw material for soybean oil, were removed.
In Asia, Malaysian crude palm oil futures pared earlier gains, with the October contract on the Bursa Malaysia Derivatives exchange settling lower by 0.80% to 4,564 Malaysian ringgit ($1,119.20) per metric ton on Thursday. Sept. 1-20 exports reportedly fell 12.8% to 24.7% from a month earlier, potentially lifting stocks further to around 3 million metric tons by month-end, Trading Economics reported.
"Palm oil remained in a corrective phase, primarily pressured by weakening exports from producing regions," SunSirs said. "Palm oil prices may remain weak in the short term as the production growth cycle in producing regions has not yet ended; a recovery in exports is the key factor to watch."