Chicago soybean oil rose on Monday as crude oil prices climbed, but expectations that the sowing of US soybeans would be rapid, capped gains.
The May soybean oil contract on the Chicago Board of Trade rose 0.65% to 68.60 cents per pound in early trade, as crude oil prices jumped 5% after the US seized an Iranian cargo ship allegedly attempting to sail past its blockade.
However, "near-term drivers are limited, and market attention is expected to shift to US soybean planting progress, which is currently proceeding relatively smoothly," price reporting agency MySteel said.
The May soybean contract fell 0.24% to $11.64 per bushel in early trade, as the grain began to detach from energy market volatility due to ample supply.
The market is awaiting the latest US Department of Agriculture's crop progress estimates due on Monday. As of April 12, US soybean planting progress stood at 6%, well above the 2% pace recorded a year ago.
In Brazil, soybean production and exports for the current marketing year are both projected to reach record highs.
For April, Brazil's National Association of Grain Exporters, Anec, expects exports to remain almost the same as in March at around 15.8 million tons, up significantly from the prior year's 13.5 mmt.
Going forward, the market's attention will gradually shift to the Trump-Xi summit, expected in mid-May, as market participants look forward to a potential increase in China's purchases of US soybeans.
In Asia, Malaysian palm oil futures edged higher on Monday, following two weekly losses, as crude oil and soybean oil rose.
The Bursa Malaysia Derivatives' May crude palm oil contract jumped 1.57% to 4,455 Malaysian ringgit ($1,125.71) per metric ton. The June contract gained 1.47% to 4,487 ringgit/mt.
Escalating tensions in the Middle East provided a boost to palm oil, according to Iceberg X trader David Ng, as cited by Dow Jones.
Palm oil remained sensitive to crude oil price movements, since its competitiveness as a biofuel feedstock hinges on fossil fuel price increases.
In Indonesia, imports of conventional diesel will discontinue from July 1, coinciding with the government's target implementation date for a higher biodiesel blend of 50%, or B50, local news agency Antara reported, citing Minister of Agriculture Andi Amran Sulaiman.
The government was also evaluating the use of palm oil in gasoline, in collaboration with state-owned plantation firm Perkebunan Nusantara IV, Sulaiman reportedly said.
In Malaysia, biodiesel companies were scaling up production to support the government's move to expand its biodiesel program from the current B10 to B12 initially, and then to B15.
Deputy Prime Minister Ahmad Zahid Hamidi, as cited by The Star, reportedly said 19 biodiesel plants were proposing to scale output by utilizing sludge, a by-product of crude palm oil processing.
The initiative aims to lower costs by mass production. At present, the facilities are producing about 1.5 million liters per month of biodiesel.
The Malaysian Palm Oil Board earlier said that around 130,000 metric tons of biodiesel will be added to annual consumption once B12 is implemented, while another 204,000 mt will be added with B15.
Analysts cited by The Edge Malaysia said the country has room to produce much more biodiesel, with only 975,207 mt produced in 2025 out of the total installed capacity of about 2.36 million metric tons per year.
Meanwhile, palm oil production in top Southeast Asian producers may be negatively impacted by El Nino phenomenon, likely providing support to palm oil futures, according to MySteel.
In the US, May-dated ethanol futures on the NYMEX recorded their fourth straight session of losses on Friday, declining by another 0.39% to $1.89 per gallon.