Firmer crude oil prices and robust export demand lifted major biofuel feedstock futures on Monday, despite higher supply outlook for Chicago soybeans and Malaysian palm oil.
The September soybean contract on the Chicago Board of Trade extended a three-session rally and rose by a further 0.30% to $11.81 per bushel in early trade. The September CBOT soybean oil climbed 0.84% to 70.02 cents per pound.
China's soybean purchases from the US have reached around 7 million metric tons, according to traders cited by Trading Economics, following a series of sales by private exporters last week.
Chinese state-owned enterprise Sinograin will reportedly auction another 360,000 tons of soybeans, its fourth sale since July, to accommodate incoming US cargoes.
"The domestic (Chinese) soybean market currently maintains a supply-surplus situation," price reporting agency MySteel said, adding that "spot trading activity is slow and traders face significant resistance in moving shipments externally."
"In August, the volume of soybean arrivals in China remained substantial, and oil processing plants maintained high operating rates," market intelligence provider SunSirs said, noting that "domestic soybean oil inventories climbed to a yearly high, creating significant supply pressure."
In the US, soybean supply outlook for the 2026/27 marketing year is projected to reach a record 4.52 billion bushels due to a larger harvested area, offsetting a decline in yield forecast to 52.7 bushels per acre from the previous 53 bushels per acre, data from the US Department of Agriculture showed.
Forecasts of rainfall and lower temperatures through September could also improve crop growing conditions and yield prospects.
In Asia, Malaysian palm oil futures closed higher on Monday as crude oil and soybean oil rose, while a stronger local currency dampened export competitiveness and capped gains.
The Bursa Malaysia Derivatives' September crude palm oil contract edged higher by 0.28% to 4,589 Malaysian ringgit ($1,127.24) per metric ton. The October contract inched up 0.15% to 4,717 ringgit/mt.
Malaysian ringgit firmed against the US dollar by around 0.6% on Monday, making exports more expensive for foreign buyers. This could impact competitiveness of Malaysian shipments, which have so far shown resilience since June.
Industry data showed that the country's exports grew month over month by 7.2% and 14.5% in June and July, respectively, while cargo surveyor estimates reportedly showed a 2.6% to 14.8% rise in Aug. 1-10 shipments versus the same period of the previous month.
Demand from top buyer India largely supported exports as palm oil purchases reportedly grew 50% from a month earlier to 730,965 metric tons, with buyers stocking up ahead of festivities.
Malaysia surpassed Indonesia to become India's leading supplier of palm oil in the first nine months of the 2025/26 marketing year, the Hindu Business Line reported, citing data from the Solvent Extractors' Association of India.
In the EU, Indonesia's export performance also declined in the current 2026/27 marketing year that began on July 1. As of Aug. 9, the EU has imported 82,000 mt of Indonesian palm oil, down 30.1% from a year earlier, according to data cited by SunSirs.
This represents a drop in the producer's market share in the EU to 30.2% from 33.9%, which "indicates weak overseas demand," SunSirs said. "This exerts downward pressure on spot palm oil prices and is considered a generally bearish factor."
Indonesia's increased 50% biodiesel blend, introduced in July, is expected to trim the country's exportable supplies, likely further impacting its market share.
In the long term, "Indonesia's B50 policy and El Nino-related production cut expectations continue to provide underlying support for far-month prices," MySteel said.
In the US, September ethanol prices on the NYMEX jumped 2.03% to about $2.02 per gallon on Friday, tracking crude oil gains.