Chicago soybean oil rose on Thursday as crude oil prices firmed, while soybeans eased slightly as prospects of improving yields due to favorable weather conditions weighed on prices.
The September soybean oil contract on the Chicago Board of Trade gained 0.19% to 67.85 cents per pound in early trade. The September CBOT soybean contract fell 0.02% to $11.56 per bushel.
Forecasts of rainfall in the coming days could support crop growing conditions during the critical soybean pod-filling stage. This could improve crop ratings, after the US Department of Agriculture reported that soybeans in good-to-excellent condition remained at 63% week over week.
Meanwhile, Chinese buying encouraged positive demand sentiment across the grains market and provided upward price momentum.
Since July 8, the USDA has confirmed 2.7 million metric tons of new-crop US soybeans sales to China and unknown destinations, based on tallied data by price reporting agency MySteel.
As the US expands its export market, the US Soybean Export Council reportedly projects exports of soybeans, soybean meal, and soybean oil will grow 5% in the 2026/27 marketing year.
"The tug of war between soybean demand and soybean production potential will continue to be the dominant price influence moving forward," agriculture intelligence provider DTN said.
MySteel projects soybean futures will trade between $11.60/bushel and $11.90/bushel in the near term.
In Asia, Malaysian palm oil futures dropped on Thursday, despite higher crude oil and soybean oil prices, as a firmer local currency and high inventories dampened strong export demand sentiment.
The Bursa Malaysia Derivatives' September crude palm oil contract fell 0.45% to 4,625 Malaysian ringgit ($1,129.43) per metric ton. The October contract edged lower by 0.34% to 4,686 ringgit/mt, ending two sessions of gains.
The Malaysian ringgit firmed against the US dollar by almost 0.1% on Thursday, increasing export prices for foreign buyers. Export attractiveness could dampen if the local currency sustains its strength.
High domestic stocks, which a Reuters survey estimated to have reached a five-month high in July, also weighed on prices.
Inventories rose 7.4% month over month as higher production offset export growth, which cargo surveyors reportedly estimated to be between 12.1% and 19.5%. A Reuters survey also showed a 14.8% rise.
Traders remained on the sidelines while waiting for the Malaysian Palm Oil Board's July industry data, due on Aug. 10.
In Indonesia, July exports dropped year over year to 2.4 mmt from 2.7 mmt, based on statistics bureau data. Total H1 volumes remained higher than a year earlier, although a potential decline in shipments linked to a richer 50% biodiesel blend, will likely reverse the trend.
In the near term, "prices are likely to maintain a mildly bearish rangebound trend," MySteel said.
Meanwhile, September ethanol prices on the NYMEX slipped 0.90% to around $1.93 per gallon on Wednesday.
Data from the US Energy Information Administration showed that domestic stocks fell in the week ended July 31 to 24.5 million barrels, compared with the previous week's 24.7 mmbbls.
Inventories declined as production softened week over week to 1.11 million barrels per day from 1.13 mmbbls/d, and as exports jumped to 200,000 barrels per day from 137,000 b/d.