The soybean complex slipped further on Thursday as crude oil prices dropped and as favorable weather conditions in the US Midwest raised prospects of improved yields.
The August soybean contract on the Chicago Board of Trade dipped 0.08% to $11.77 per bushel in early trade. The August CBOT soybean oil contract fell 0.13% to 69.08 cents per pound.
Forecasts of widespread rainfall in the US Midwest this weekend pushed prices downward. This could enhance crop growing conditions and improve yields, following reports from the US Department of Agriculture that crop ratings recently decreased due to heat.
Record Brazilian exports also weighed on sentiment, with trade association Abiove reportedly estimating this year's volume to reach 115.4 million metric tons. July exports are also projected to reach a monthly record of 12.5 mmt, according to the National Association of Cereal Exporters, Anec.
"Brazil's continued price advantage is steadily eroding US soybean export market share," price reporting agency MySteel said.
Nonetheless, Chinese buying has provided some upside, with state-owned Sinograin reportedly planning to auction 500,000 metric tons of imported soybeans on July 31 to free up storage for new US cargoes.
Going forward, price movement will largely hinge on US weather patterns, particularly during the August growing period, according to MySteel.
In Asia, Malaysian palm oil futures were mixed on Thursday as crude oil and rival soybean oil weakened, while exports and Indonesia's biodiesel demand remained strong.
The Bursa Malaysia Derivatives' August crude palm oil contract fell 0.07% to 4,554 Malaysian ringgit ($1,114.67) per metric ton. The September contract firmed 0.32% to 4,643 ringgit/mt.
Higher Malaysian exports this month have so far cushioned price downside, according to Sunvin commodity research head Anilkumar Bagani, as cited by Reuters. Cargo surveyors reportedly estimated July 1-25 shipments to have risen between 8.1% and 15.9% from a month earlier.
In Indonesia, exportable supplies may drop after the government raised this year's palm oil-based biodiesel allocation to around 16.8 million kiloliters from the previous 15.6 million kiloliters, Argus reported, citing a document. This followed the new mandate introduced on July 1 to increase palm-based biodiesel blending to 50% from 40%.
To maintain export competitiveness, Indonesia is reportedly seeking a US tariff exemption for palm oil exports, after the US imposed a 10% duty on nations associated with forced labor. Top palm oil producers Indonesia and Malaysia are among the countries that received the penalty in July.
Demand from top importer India may strengthen in Q3 ahead of festive season.
Meanwhile, in the EU, palm oil imports for the July 1-26 period reportedly dropped 39% year over year to 130,000 tons. July marks the beginning of the 2026/27 marketing year.
Going forward, analysts expect a developing El Nino weather phenomenon to negatively impact long-term yields.
Accordingly, RHB Research raised its crude palm oil forecast for 2027 and 2028 to 4,500 ringgit/mt and 4,400 ringgitmt, respectively, from the previous outlook of 4,300 ringgit/mt, The Edge Malaysia reported.
Meanwhile, August ethanol prices on the NYMEX steadied at $1.95 per gallon on Wednesday, following bearish industry data from the US Energy Information Administration.
For the week ended July 24, domestic ethanol production rose to 1.13 million barrels per day, from the previous week's 1.09 mmbbl/d, data showed.
With exports also decreasing week over week to 137,000 barrels per day from 158,000 b/d, stocks grew to 24.7 million barrels from 24.5 mmbbls.