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US Biofuels Update: Soybean Futures Bounce Off Multi-Month Lows

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Biofuels feedstock futures closed mixed on Wednesday, with the soybean market bouncing off of multi-month lows hit earlier this week.

The Chicago Board of Trade August soybean futures contract closed 0.80% higher at $11.33 1/4 per bushel, while the CBOT August soybean oil futures contract settled 0.36% lower at 66.69 cents per pound.

The Nymex August ethanol futures contract settled 0.13% lower on Tuesday at $1.88 per gallon.

Rhett Montgomery, a DTN analyst, said that while Tuesday's US Department of Agriculture data wasn't explicitly bullish, sometimes the market's worst fears lie in anticipation, and simply having the estimates out can be a weight off prices.

"Soybean futures extended their mid-week bounce on optimism of further Chinese demand, as well as technical factors," the analyst said.

He added that prices built momentum on Tuesday's bounce from the 200-day moving average of $11.15, which remains the immediate support level for futures.

On Wednesday, the Energy Information Administration reported that for the week ending June 26, US ethanol production averaged 1.12 million barrels per day, slightly below last week's 1.09 mmb/d and above last year's 1.08 mmb/d.

Domestic ethanol inventories ended the week at 24.7 mmbbls, slightly above 24.6 mmbbls from a week ago and above 24.1 mmbbls a year ago.

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