Chicago soybeans and Malaysian palm oil slipped on Wednesday as traders locked in profits after a recent price rally, although supply concerns limited losses.
The November soybean contract on the Chicago Board of Trade dropped 0.93% to $13.05 per bushel in early trade after reaching a contract high in the previous session. The October soybean oil contract fell from one-month highs by 0.39% to 72.17 cents per pound.
Prices declined after recent gains driven by rising crude oil prices.
Nonetheless, losses were capped as uncertainties over US soybean yield potential grew. The US Department of Agriculture reported that 58% of the soybean crop was rated good-to-excellent as of Aug. 30, down relative to the previous week's 60% and the prior year's 65%.
Elevated temperatures in the coming days for most parts of the US grain belt "may prove to be less than ideal for grain filling, especially in areas already struggling with low soil moisture," agriculture intelligence provider DTN said.
In Brazil, the 2026/27 soybean crop is reportedly expected to reach a record 183.5 million metric tons, based on estimates by consultancy StoneX.
Chicago soybeans also received support from strong exports, with the USDA reporting another 136,000 metric tons of soybean sales to China.
The domestic soybean crush in July was also slightly higher than expected at 222 million bushels, according to ADM Investor Services, while crush margins on Tuesday rose $0.05 per bushel to $2.21 per bushel.
Amid bullish market drivers, "crops remain well supported through profit taking dips," DTN said.
In Asia, Malaysian palm oil futures fell on Wednesday as soybean oil weakened and exports declined, while traders also locked in profits after recent price rally.
The Bursa Malaysia Derivatives' October crude palm oil contract eased 0.45% to 4,831 Malaysian ringgit ($1,197.01) per metric ton. The November contract dipped 0.30% to 4,958 ringgit/mt.
Cargo surveyors reportedly estimated Malaysian shipments in August to have fallen between 6.5% and 14.9% from a month earlier. That stalls a run of export growth recorded in June and July.
The Malaysian ringgit firmed against the US dollar by about 1.5% in August, dampening export competitiveness due to consequent higher prices. The local currency showed some weakening in the first two days of September, potentially improving the attractiveness of shipments.
Higher palm oil prices relative to soybean oil also weighed on demand, particularly in key importers India and China, although upcoming festivities may provide some upside.
In the EU, palm oil imports for the current marketing year that began in July slumped 21% year over year, according to data cited by Trading Economics.
Meanwhile, a widening discount between palm oil and gas oil due to rising crude oil prices improved biofuel demand sentiment.
Weather-driven supply risks also continued to provide upward momentum, as a developing El Nino weather phenomenon may curb fresh fruit bunch production going forward.
Palm oil futures may remain firm and exceed 5,000 ringgit/mt in the near term following a recovery in late August, according to Reuters technical analyst Wang Tao.
PhillipCapital also expects the market to remain "mildly bullish" after the recent price rebound to the 5,000 ringgit/mt mark.
"Palm oil futures are expected to trade in a volatile range at elevated levels," price reporting agency MySteel said, citing a combination of bearish and bullish market drivers.
Meanwhile, September ethanol prices on the NYMEX extended gains for a third straight session, rising by a further 1.47% to about $2.08 per gallon on Tuesday, as they tracked crude oil price gains.