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US Biofuels Update: Soybean Gains on Crop Weather Concerns, Soybean Oil Follows Crude Lower

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Biofuels feedstock futures diverged on Friday, with bullish crop weather propping up soybean futures and Pakistan offering peace talks negotiations to the US and Iran, which sent crude oil and thus soybean oil lower.

The Chicago Board of Trade August soybean futures contract closed 0.75% higher at $12.46 3/4 per bushel, while the CBOT August soybean oil futures contract settled 1.92% lower at 74.14 cents per pound.

The Nymex August ethanol futures contract settled 0.78% higher on Thursday at $1.94 per gallon.

Rhett Montgomery, a DTN analyst, said corn and soybeans remained well supported on Friday by the two-week weather outlook, which continues to call for above-average temperatures and minimal rainfall for the US Grain Belt.

"The soybean market largely ignored outside influence on Friday, trading higher on weather concerns through early August for the US crop compounded by recent demand strength which looks to keep the stress on the supply side of the balance sheet heading into the next marketing year," Montgomery said, noting that the August contract is higher now in five of the past six sessions.

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US Oil Update: Crude Settles Higher as Houthi Attacks Deepen Supply Risk Fears

Crude futures settled higher in after-hours trading on Thursday as escalating Middle East hostilities and threats to commercial shipping by Yemen's Houthis heightened global supply fears.Front-month West Texas Intermediate crude futures rallied 6.4% to $92.536 per barrel, while Brent futures soared by 6.9% to $100.65/bbl.US commercial crude oil inventories increased by 2 million barrels to 411.7 mmbbls in the week ended July 17, the Energy Information Administration said in its weekly report on Wednesday.Crude inventories are now about 6% below the five-year average for this time of year, the EIA saidGelber & Associates said that the narrative of low US crude inventories is adding support, leaving prices highly sensitive to further military action or signs of de-escalation.On Thursday, President Trump said that the US will punish Iran for any ship attacks by the Houthis, after the group targeted two Saudi Arabian vessels in the Red Sea, extending the Middle East conflict to a second major shipping chokepoint."If they do this again, the US will hold Iran responsible, in that the Houthis are a surrogate and/or proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis themselves," Trump said in a social media post on Truth Social.The US President's remarks followed Houthis' attack on two Saudi Arabian oil tankers, the Encelia and the Layla, in the Red Sea. The attack triggered a fire on the Encelia, while several other tankers altered course or suspended transits through the vital Bab el-Mandeb Strait.The US Central Command also completed its 12th consecutive night of attacks on Iranian targets on Wednesday, hours after Trump said the US would destroy an Iranian bridge or power plant each time Iran attacks a ship in the Strait of Hormuz.US forces struck Iranian military targets including maritime capabilities, missile and drone storage facilities, coastal surveillance sites, and air defense assets, Centcom said in a post on X, adding that over 50,000 US service members are operating across the Middle East.Iran, in response, said it attacked US missile systems, weapons and fuel storage sites in Jordan, as well as US military posts in Kuwait.Meanwhile, Iran's Islamic Revolutionary Guards Corps said an oil tanker caught fire after an explosion while attempting to follow a mined route in the southern area of the Hormuz near the coast of Oman and that two others had turned back.Kpler strategists said that with pressure building on both major export corridors, market attention is shifting from concerns over excess supply to the growing risk of prompt crude tightness.Saxo Bank strategists said that the US-Iran conflict escalated further, with Centcom launching fresh strikes on Iranian military targets on Wednesday night and both sides playing down the prospect of near-term talks.

Oil & Energy

Brent Supported by Gulf Supply Disruptions, Tight Fuel Markets, Macquarie Says

Brent's recent rebound of about $20 per barrel from early July lows should keep crude prices supported over the next few weeks as Gulf supply declines, Vikas Dwivedi, Global Energy Strategist at Macquarie, said.Dwivedi noted that the rally comes even though earlier supply surges during the interim memorandum of understanding period have largely satisfied near-term demand.The analyst said a renewed geopolitical risk premium and a short squeeze have driven the recent oil rally.Dwivedi sees a moderate chance of limited escalation but a low risk of broader conflict absent "a serious miscalculation by either side."He expects refining margins to remain elevated as limited processing capacity keeps fuel markets tight.The analyst attributed the tightness to four potential sources.Russian refinery runs have dropped to 3.5 million barrels per day, their lowest level in 20 years due to Ukrainian attacks.Other factors contributing to this tightness include the US Gulf Coast hurricane season posing outage risks, unseasonably high temperatures impacting European refinery outages, and lower Indian gasoil exports."The ability to resupply global product markets could be limited as the majority of global spare capacity sits in Asia, predominantly China," the analyst said.However, Macquarie expects lower export quotas will likely limit additional Chinese fuel shipments, keeping refined product markets tight over the near term.The firm said refined product markets saw material tightness, with diesel and gasoil markets tightening the most.About 20% of global seaborne diesel supplies are constrained by Strait of Hormuz disruptions and Russia's export ban. African, European and South American buyers now compete more aggressively for US exports, it added.The firm said oil flows through the Strait of Hormuz have slipped near April levels, with the seven-day average for crude, condensate and clean products at about 3 million b/d, or 16% of the January-February pre-conflict average and roughly one-third of memorandum of understanding-period volumes.

Oil & Energy

Hormuz Ship Transits Rise, But Crude Tanker Flows Remain Well Below Pre-Crisis Levels

Commercial traffic through the Strait of Hormuz rose slightly on Wednesday even as US military strikes on Iranian targets and renewed attacks on shipping in the Red Sea raise security risks.Strait of Hormuz crossings increased to 15 confirmed transits on Wednesday, up 66.7% over the day from nine crossings recorded the previous day, according to MarineTraffic data.Vessel routing remained concentrated around the Iranian Unilateral Scheme, with eight of the total 15 crossings, MarineTraffic data showed. The International Maritime Organization's Hormuz Traffic Separator Scheme accounted for four crossings, while three crossings were "Route Undetermined."Although Gulf producers continue loading export cargoes, Kpler said confirmed crude tanker transits through the Hormuz have fallen by about 75% from pre-crisis levels.The sharp decline has left growing volumes of crude accumulating inside the Persian Gulf as shipowners delay sailings, reassess security risks or wait for naval protection.The disruption is spreading beyond the Strait into the Red Sea, raising concerns that two of the world's key oil shipping corridors are simultaneously coming under pressure.According to MarineTraffic, Bab el-Mandeb transits also ticked up, with 43 confirmed transits on Wednesday, up 22.9% over the day from 35. "Traffic remained balanced by direction, with 21 vessels entering the Red Sea and 22 exiting," MarineTraffic reported.However, MarineTraffic analysts cautioned that vessel behaviour in the Bab el-Mandeb Strait continues to remain "sensitive," following the Houthi movement's warnings to Saudi Arabian shipping flows.There have been a total of five westbound ships that have U-turned around the Gulf of Aden approach, while six additional U-turns have been identified inside the Red Sea.MarineTraffic data showed two China-linked Very Large Crude Carriers successfully transited the Bab el-Mandeb Strait on Thursday carrying a combined 4 million barrels of Saudi crude.One of them, a Singapore-flagged vessel briefly reversed course and paused in the central Red Sea before resuming its southbound voyage, followed by the other vessel flagged to Hong Kong.Kpler said that ffshore ship-to-ship transfers remain active but at lower volumes than before the conflict intensified, limiting the industry's ability to offset the bottleneck.The latest escalation follows continued US military operations against Iran.The US Central Command said on its forces completed a 12th consecutive night of strikes on Wednesday, targeting Iranian maritime capabilities, missile and drone storage facilities, coastal surveillance systems and air-defense assets."Since resuming the naval blockade against Iran nine days ago, Centcom has redirected 12 commercial vessels and disabled 1 to prevent ships from entering or leaving Iranian ports or coastal areas," Centcom said in a post on X.Commercial traffic through the Strait of Hormuz remained subdued on Wednesday, according to the UK Maritime Trade Operations, with vessels continuing to use both the southern Omani corridor and the northern Iranian-controlled route.Operators remained cautious following previous attacks, while several companies delayed or rescheduled voyages.UKMTO said Iran's Islamic Revolutionary Guard Corps maintained an active presence around the waterway through radio hailing, drone overflights and surveillance of merchant vessels. The advisory also warned that the risk from drifting or uncharted naval mines remains elevated around established shipping lanes.The maritime agency reported that a vessel was struck by an unidentified projectile, triggering a fire that crew members were attempting to extinguish.The incident follows a confirmed Houthi attack on Saudi tankers in the southern Red Sea, heightening concerns that the Iran-backed group has shifted from deterrence to active targeting of commercial shipping.The developments have heightened concerns that disruptions could increasingly affect both the Hormuz and the Bab el-Mandeb simultaneously, two maritime chokepoints through which global crude and refined products normally pass.The IMO's daily Strait of Hormuz incident tracker showed one confirmed attack so far this week. This brings the total number of confirmed maritime security incidents in the region to 61 as of Thursday.The IMO tracker provides a daily log of verified strikes on ships attempting to transit the Strait of Hormuz since the conflict began, with the earliest incident recorded on March 1.