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US Biofuels Update: Soybean Oil Futures React Negatively to US Rejection of Iran Peace Proposal

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Biofuels feedstock futures closed mixed on Monday, as the US rejected Iran's response to its proposal to end the war and prepared for a trade meeting with Chinese leaders.

The Chicago Board of Trade July soybean futures contract closed 0.41% higher on Monday at $12.13 per bushel, while the CBOT July soybean oil futures contract settled 0.78% lower at 73.74 cents per pound.

On Thursday, the June ethanol futures contract on the Nymex exchange ended 0.26% lower at $1.93 per gallon.

Rhett Montgomery, DTN analyst, said the mixed trading sentiment was led by soybean oil.

"The soybean market also posted a second straight higher session but faded from the highest point of the morning as futures were torn between lower soybean oil influence and firm meal prices," Montgomery said in a daily note.

Montgomery said the soybean futures traders have a lot of market-impacting information headed their way this week.

The analyst added that the week is shaping up to be significant for the market, with the May World Agricultural Supply and Demand Estimates report due on Tuesday and Trump set to visit China at the end of the week.

"In position news, last Friday's Commitments of Traders report showed that the combined noncommercial net-long in futures surpassed 1 million contracts, a level which has only occurred twice before, in late 2020/early 2021 and again in spring of 2022," Montgomery said.

On Monday, the US Department of Agriculture's Weekly Export Inspection Report showed that soybean inspections totaled 24.1 million bushels for the week ending May 7.

Total inspections for 2025-26 are now at 1.25 billion bushels, down 23% from the previous year. USDA is estimating soybean exports to total 1.54 bb in 2025-26, down 18% from the previous year.

Soybean inspections are running behind USDA's estimated pace, even as USDA's estimate of soybean ending stocks is 20% above the previous five-year average.

For Tuesday's WASDE, traders are expecting a slightly higher production outlook for 2026 compared to 2025, but expect total reserves to remain steady amid an improved demand outlook, Montgomery said.

Globally, the USDA is expected to raise its estimates of corn and soybean output in Brazil and Argentina for 2026 and 2027 on Tuesday.

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