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US Biofuels Update: Soybean Futures Fall From Technical Resistance Despite Strong US Export Demand

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Biofuels feedstock futures closed lower on Thursday, with soybean futures retreating from technical resistance despite strong export demand, while soybean oil tracked weaker energy markets.

The Chicago Board of Trade August soybean futures contract closed 0.6% lower at $11.95 per bushel, while the CBOT August soybean oil futures contract settled 0.52% lower at 70.57 cents per pound.

The Nymex August ethanol futures contract settled 0.13% lower on Thursday at $1.92 per gallon.

Soybean futures retreated after Wednesday's gains, meeting resistance near the $12 level, triggering technical selling. Outside markets also weakened as the US dollar recovered and crude oil eased, said Rhett Montgomery, analyst at DTN.

Despite Thursday's decline, August soybean futures remain above their three major moving averages, with support clustered near $11.70, Montgomery added.

Weather remains a key focus as traders await whether cooler temperatures will be accompanied by meaningful rainfall across the Grain Belt.

US Department of Agriculture export data showed old-crop soybean sales improved to 6.9 million bushels, while new-crop sales reached 65 million bushels, among the strongest mid-July totals in two years, according to Montgomery.

Shipments of 16.7 million bushels lifted total soybean export commitments slightly ahead of the US Department of Agriculture's forecast pace.

Meanwhile, drought coverage across US soybean acreage eased to 18% from 19% in the latest weekly update, Montgomery said.

South American soybean supplies remain ample, while developments in Europe and the Black Sea could influence broader oilseed markets, Montgomery said.

US soy crush margins eased to $117 per metric ton in Q3 from $139/mt in Q2 as lower soybean oil prices weighed on returns.

Even so, margins remain at a five-year seasonal high and about $40/mt above the five-year average, TPH Energy said.

TPH Energy expects US soy crush margins to remain above midcycle levels as stronger Renewable Volume Obligations support biofuel demand.

The higher blending targets should continue to underpin soybean oil prices despite the recent weakness, the firm said.

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