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US Biofuels Update: Traders Build in Crop Weather Risk Premium, Pushing Soybean Complex Higher

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Biofuels feedstock futures closed higher on Thursday, with traders focused on uncertain crop weather in the Midwest in late July and early August.

The Chicago Board of Trade August soybean futures contract closed 0.36% higher at $12.37 1/2 per bushel, while the CBOT August soybean oil futures contract settled 0.15% higher at 75.59 cents per pound.

The Nymex August ethanol futures contract settled unchanged on Wednesday at $1.92 per gallon.

Rhett Montgomery, a DTN analyst, said crop weather risk and stronger energy markets combined to move the soybean and soybean oil markets higher.

"Reports of strikes against two Saudi oil tankers in the Red Sea by Houthi militants sent Brent crude futures back over $100 per barrel for the first time in two months and mark a significant escalation of the war through the region," Montgomery said.

He added that the soybean market continued to climb on Thursday, "... higher now in four of the past five sessions and supported by strong demand through July coupled with the concerning Midwest weather outlook."

The analyst said that Thursday's Export Sales report shared another decent round of data for soybeans.

On Thursday, the US Department of Agriculture reported that for the week ending July 16, soybean export sales totaled 2.1 million bushels or 56,400 metric tons for the 2025-26 marketing year and an increase of 56.5 mb or 1,537,200 mt for 2026-27.

Last week's export shipments of 11 mb were below the 15.6 mb needed each week to achieve USDA's export estimate of 1.520 billion bushels in 2025-26.

Soybean export commitments now total 1.520 bb in 2025-26 and are down 18% from a year ago. That is ahead of USDA's estimated pace, even as USDA's estimate of US ending soybean stocks is 13% larger than the previous five-year average.

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