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US Biofuels Update: Soybean Complex Trades Higher on Oil Gains, Technical Support

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Biofuels feedstock futures closed higher on Wednesday, with the soybean market propped up by technical support and higher soybean oil prices.

The Chicago Board of Trade July soybean futures contract closed 0.04% lower at $11.85 per bushel, while the CBOT July soybean oil futures contract settled 1.08% higher at 75.16 cents per pound.

The Nymex July ethanol futures contract settled 1.10% lower on Tuesday at $2.02 per gallon.

Rhett Montgomery, DTN analyst, said the soybean market was held up by technical support and soybean products.

"Crude oil futures remained under pressure through the session, and among the lowest West Texas Intermediate prices in over a month. Meanwhile, the soybean complex was able to find support led by strong trade in products markets, with soybean oil reversing from early lows along with diesel futures," Montgomery said.

The analyst said that traders will begin to pay heightened scrutiny to weekly export sales reports following the White House's report that China will buy 25 million metric tons of US soybeans each of the next three years.

US soybean planting reached 79% complete in the week ending May 24, still well ahead of the average pace for late May.

In other biofuels news, the Renewable Fuels Association on Wednesday urged the US Department of the Treasury to swiftly finalize "clear, stable, and practical regulations" implementing the Section 45Z Clean Fuel Production Credit.

During a public hearing, the RFA also called on the Treasury to immediately release an updated 45ZCF-GREET model that integrates changes to the 45Z program mandated by last year's One Big Beautiful Bill Act.

The RFA, among many requests, urged the Treasury to include distinct pathways for ethanol made from cellulosic corn and sorghum kernel fiber.

These fuels, which are excluded from the existing version of 45ZCF-GREET, offer extremely low emissions rates.

Additionally, Treasury was urged to work with the Department of Energy to correct an unintended penalty in the emissions rate modeling framework for facilities that use combined heat and power, or CHP, systems.

Testimony continues on Thursday and Friday.

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