Chicago soybean futures rose on Tuesday, touching their highest since December 2023, as higher crude oil prices and poor crop conditions buoyed sentiment.
The November soybean contract on the Chicago Board of Trade reached a new contract high as it firmed 0.89% to $12.99 per bushel in early trade. The October soybean oil contract rose to a one-month high as it gained 1.95% to 72.21 cents per pound.
The US Department of Agriculture reported that the condition of the soybean crop continued to decline, with 58% rated as good-to-excellent as of Aug. 30. This is down relative to the previous week's 60% and the prior year's 65%.
Yield uncertainties persist amid variable weather patterns, with some producing areas experiencing rainfall while others see hot and dry conditions, AgWeb reported, citing Brian Grete of Commstock Investments.
On the demand side, strong exports have boosted sentiment, following a series of sales to China and unknown destinations. The USDA on Monday said private exporters sold another 159,000 mt of soybeans to unnamed countries for delivery during the 2026/27 marketing year.
Analysts believe that most of the volumes sold to unknown destinations are going to China, as the nation progresses toward its 25 million metric ton pledge.
Meanwhile, the US administration's plan to adjust 2026 and 2027 biofuel exemptions to compensate for the doubling of 2025 volumes eased concerns about weakening crop and biofuel demand.
Reflecting this, ethanol September prices on the NYMEX firmed by a further 0.37% to about $2.05 per gallon on Monday.
In Asia, Malaysian palm oil futures closed higher on Tuesday as rival soybean oil and crude oil strengthened, and as a weaker local currency improved export demand sentiment.
As the market reopened following a public holiday, the Bursa Malaysia Derivatives' October crude palm oil contract gained 1.36% to 4,853 Malaysian ringgit ($1,202.46) per metric ton. The November contract rose 1.61% to 4,973 ringgit/mt.
The Malaysian ringgit eased against the US dollar by almost 0.3% at the start of the month, partially reversing a 1.5% strengthening in August. This reduces export prices for foreign buyers, potentially boosting demand sentiment after a lull.
Malaysian shipments for the Aug. 1-25 period reportedly fell between 11.4% and 20% versus a month earlier, according to cargo surveyor estimates.
Indonesian exports, meanwhile, dropped about 1% year over year to 13.5 million tons from January through July, according to statistics cited by Reuters.
Cheaper soybean oil has weighed on palm oil demand, particularly in key buyers China and India.
In China, "the deep inversion of the soybean-palm oil price spread continues to curb terminal blending consumption, with (palm oil) demand notably lagging," price reporting agency MySteel said.
"The strong supply and weak demand pattern is unlikely to reverse in the short term," the firm said.
Malaysian inventories reached a five-month high in July, with palm oil trees at the peak of their production cycle.
Producing regions are bracing for the potential impact of the El Nino weather phenomenon on palm oil yields, with the Indonesian government preparing irrigation plans and establishing programs for fertilizer distribution, crop maintenance, and pest control, the Jakarta Globe reported, citing agricultural minister Andi Amran Sulaiman.