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US Biofuels Update: Soybean Oil Rallies as Strong Export Demand Lifts Futures

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Biofuels feedstock futures diverged on Friday, with the soybean oil finishing sharply higher as strong export demand and a rally in vegetable oils supported prices, while ethanol futures settled lower.

The Chicago Board of Trade August soybean futures contract closed 0.79% higher at $12.04 1/4 per bushel, while the CBOT August soybean oil futures contract settled 3.29% higher at 74.81 cents per pound.

The Nymex August ethanol futures contract settled 0.65% lower on Friday at $1.91 per gallon.

Soybean futures climbed after the US Department of Agriculture reported almost 26 million bushels of new-crop export sales, led by purchases from China and Mexico, reinforcing optimism over export demand, according to DTN analyst Rhett Montgomery.

The USDA said private exporters sold 340,000 metric tons of soybeans to China, 256,634 mt to Mexico and 110,000 mt to unknown destinations for delivery in the 2026/27 marketing year.

Montgomery said at least 31 million bushels of additional sales were announced after the latest weekly export report, lifting the new-crop sales book to 109% of the outstanding sales level recorded by mid-July 2025.

"Soybean demand has run red hot in recent weeks," Montgomery said, adding that higher soybean oil prices boosted crush premiums and helped August soybean oil futures reach their highest close since early June.

Montgomery said stronger demand is tightening the US soybean balance sheet, leaving ending stocks vulnerable to falling below 300 million bushels if yields slip from the current record-level forecast, with weather through July and August expected to be the key price driver.

Global soybean supplies remain ample as South America harvests another large crop, but Montgomery said steady world demand is expected to absorb much of the additional production.

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