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US Biofuels Update: Soybean Futures Ignore Bearish USDA Report, Follow Soybean Oil Futures Higher

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Biofuels feedstock futures closed higher on Wednesday, with soybean futures borrowing strength from a higher soybean oil market due to the Middle East war.

The Chicago Board of Trade November soybean futures contract closed 1.24% higher at $11.83 1/4 per bushel, while the CBOT September soybean oil futures contract settled 0.86% higher at 69.16 cents per pound.

The Nymex September ethanol futures contract settled 0.89% lower on Tuesday at $1.95 per gallon.

Rhett Montgomery, a DTN analyst, said the USDA's World Agricultural Supply/Demand Estimates Report was not directly supportive for the soybean market.

"Despite a less outwardly bullish report relative to corn, soybeans eventually climbed slightly by the close - supported by a general bullish attitude for Wednesday across crop futures but also still plenty of bullish arguments to be made for future soybean fundamentals," Montgomery said.

He added that if it holds, the 1.4 million-acre increase in Wednesday's WASDE will be the largest upward revision from the June acreage survey in the past 32 years.

On Wednesday, USDA reported sales of 244,000 metric tons of soybeans for delivery to China during the 2026/2027 marketing year.

Also, the USDA's August WASDE showed US soybean crush for 2026/27 has increased by 30 million bushels to 2.78 billion, driven by robust crush margins and stronger demand for both soybean meal and oil.

US soybean oil domestic use is higher following higher demand in the prior marketing year. US soybean exports are unchanged, and ending stocks are raised by 10 million bushels to 320 million bushels on higher supplies.

In its report, USDA estimated 320 million bushels of US ending soybean stocks for 2026-27, up 10 mb from July and based on a record 4.519 billion bushels of production. US ending soybean stocks for 2025-26 decreased to 325 mb from 330 mb, on higher crush.

Meanwhile, the Energy Information Administration's Weekly Petroleum Status Report showed that the week ending Aug. 7, US ethanol production averaged 1.12 million barrels per day, above last week's 1.11 mmb/d and above last year's 1.09 mmb/d.

Domestic ethanol inventories ended the week at 24.8 million barrels, above 24.5 mmbbls a week ago and above 22.6 mmbbls a year ago.

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