Chicago soybean futures fell on Thursday, pulling back from previous-session contract highs, as they tracked sharp losses in wheat after Russian President Vladimir Putin floated the possibility of a peace agreement with Ukraine.
The November soybean contract on the Chicago Board of Trade dipped 0.99% to $12.97 per bushel in early trade after exceeding the $13 mark in the previous session. The October soybean oil contract also weakened, slipping 1.84% to 69.34 cents per pound.
Long profit-taking also dominated market movements, according to price reporting agency MySteel, pushing prices lower.
Despite the recent weakening, the soybean complex has support from a run of Chinese purchases, with the US Department of Agriculture reporting another 202,000 mt of soybean sales to China. This followed the country's soybean purchase of 136,000 mt reported at the start of the month.
Meanwhile, expectations of higher biofuel demand in the upcoming years also provided an upside. The US administration plans to increase 2026 and 2027 biofuel requirements to compensate for higher exemptions for the 2025 compliance year.
Higher domestic and export demand could deplete stocks, especially with an uncertain yield outlook related to weather patterns. Soybean crop conditions have continued to decline toward the end of August, based on USDA ratings.
Going forward, "global corn and soybean markets could enter a stronger pricing cycle in 2027 as declining grain inventories, elevated fertilizer costs and expanding biofuel demand increase competition for agricultural supplies," S&P Global said.
In Asia, Malaysian palm oil futures closed lower on Thursday driven by sluggish exports and softer Chicago soybean oil, although prospects of lower supply due to drought limited losses.
The Bursa Malaysia Derivatives' October crude palm oil contract lost 1.30% to 4,768 Malaysian ringgit ($1,181.40) per metric ton. The November contract fell 1.09% to 4,904 ringgit/mt.
Cargo surveyors reportedly estimated Malaysian shipments in August to have fallen 6.5% to 14.9% from a month earlier, reversing export growth in June and July.
Subdued export demand and high seasonal production are expected to further lift domestic stockpiles, which have already risen to a five-month high in July.
A weaker local currency could boost attractiveness of exports by making them cheaper, with Malaysian ringgit easing against the US dollar by 0.4% so far this week.
Upcoming festivities in China and India could also provide some upside, but higher palm oil prices compared with soybean oil serve as headwinds.
In China, "the deep inversion of the soybean oil-palm oil spread has dampened (palm oil) blending demand, and spot basis quotes are trending weakly," MySteel said.
Nonetheless, expectations of lower production going forward due to a developing El Nino weather phenomenon continued to provide upward momentum.
Indonesian palm oil association Gapki projected the nation's 2027 output to decline to 56.8 million metric tons from the 2026 outlook of 58.5 mmt, Reuters reported.
Meanwhile, October ethanol prices on the NYMEX rose for a fourth straight session, gaining by a further 0.48% to about $2.09 per gallon on Wednesday, as inventories declined.
Data from the US Energy Information Administration showed that in the week ended Aug. 28, domestic stockpiles fell to 25.0 million barrels from the previous week's 25.2 mmbbls. This is despite lower exports, which fell to 104,000 barrels per day from 162,000 b/d.
Production, meanwhile, remained largely unchanged at 1.1 million barrels per day.