Weaker crude oil prices and favorable planting conditions in the US dragged Chicago soybeans lower on Friday, bringing weekly losses to about 5%.
The July soybean contract on the Chicago Board of Trade declined for a sixth consecutive session by a further 0.07% to $11.29 per bushel. The soybean oil contract was down 0.05% to 76.25 cents per pound in early trade, and was on track to lose 1.85% over the week.
Muted Chinese buying, despite the US-China summit in mid-May, also weighed on the soybean complex.
BMI analysts cited by Reuters said soybean trade flows between the two countries will likely increase after a period of low purchases, to show political goodwill.
Data from the US Department of Agriculture showed that soybean exports totaled 276,900 metric tons in the week ended May 28, down 8% versus the prior week's level but up 24% from the four-week average.
Cheaper Brazilian cargoes continued to compete with US soybeans, which are sold at premiums of $0.20 to $0.30 per bushel, according to ADM Investor Services.
Domestic demand in the US, meanwhile, will be underpinned by higher biofuel blending mandates, which face criticisms from trade groups.
The American Fuel and Petrochemical Manufacturers trade association recently filed a lawsuit challenging the Environmental Protection Agency's final mandates, citing higher compliance costs and a potential increase in fuel prices.
In Asia, Malaysian palm oil futures tracked lower crude oil prices on Friday, although futures posted a weekly gain of around 0.5% amid a weakening local currency and following the implementation of Indonesia's new export policy.
The Bursa Malaysia Derivatives' July crude palm oil contract edged lower by 0.88% to 4,526 Malaysian ringgit ($1,135.73) per metric ton. The August contract slipped 1.02% to 4,554 ringgit/mt.
Malaysian ringgit declined against the US dollar by 1.9% over the week, making shipments cheaper to foreign buyers, thereby supporting the export market.
In key buyer China, "palm oil importers have shown high enthusiasm for securing cargoes recently, and future arrivals of palm oil are expected to gradually increase," price reporting agency MySteel said.
The picture, however, is different in top importer India, where palm oil purchases remained below average levels in May despite a slight month-over-month increase to 551,000 metric tons from 513,403 mt, according to dealers cited by Reuters.
Subdued Indian buying came as palm oil's price differential versus soybean oil narrowed, with soybean oil purchases reportedly surging 38% month over month to 497,000 mt in May, the highest in five months.
As a result, Malaysian exports during the period were estimated to have dropped between 8.8% and 15.5% from a month earlier, a Reuters survey showed. This offset the impact of lower production, pushing inventories higher for a second straight month.
Industry data will be released on June 10, according to the Malaysian Palm Oil Board website.
"In the short term, the market may continue to decline in search of support at lower levels, with participants largely awaiting the MPOB report for guidance," MySteel said.
Wang Tao, a Reuters market analyst, said palm oil prices have recently broken an upward trend, suggesting the possible start of a downward trajectory.
In the US, July ethanol prices on the NYMEX extended losses for a fifth consecutive session by 1.03% to $1.93 per gallon on Thursday.