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US Biofuels Update: Traders Pressure Soybean Futures With Positioning Ahead of USDA Data

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Biofuels feedstock futures closed lower on Tuesday, with soybean traders positioning ahead of Wednesday's US Department of Agriculture World Agricultural Supply and Demand Estimates monthly report.

The Chicago Board of Trade November soybean futures contract closed 0.91% lower at $11.68 3/4 per bushel, while the CBOT September soybean oil futures contract settled 1.38% lower at 68.57 cents per pound.

The Nymex September ethanol futures contract settled unchanged on Monday at $1.97 per gallon.

Rhett Montgomery, a DTN analyst, said that weather and positioning ahead of the USDA Report on Wednesday pressured soybeans.

"Precipitation models calling for rainfall later this week across the U.S. grain belt ranging from Ohio northwestward to North Dakota were a likely catalyst for selling, despite steady to lower ratings for US corn, soybeans, and spring wheat crops in Monday's Crop Progress update," Montgomery said.

He added that looking ahead to the new crop, it has been a strong summer for sales, compared with last year.

As of the end of July, China has purchased just over 3 million metric tons of US soybeans, with potentially more purchases to come, but it still has a long way to go to the 25 mmt goal for 2026-27 set forth by the White House, the analyst said.

USDA reported another 5 million bushels of new crop soybeans sold to China on Tuesday as the new crop sales book remains active.

Looking ahead, only minor rounding adjustments are expected to world soybean estimates in Wednesday's USDA update, with US forecasts likely to be the largest influence on world estimates.

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