Commodities
Biofuels Update: Soybeans Extend Declining Trend; Palm Oil Also Falls
Chicago soybeans continued to decline for an eight straight session, as favorable weather conditions support planting in the US and as Chinese buying remained lackluster.The July soybean contract on the Chicago Board of Trade fell by a further 0.09% to $11.15 per bushel. The July soybean oil contract lost 0.15% to 74.45 cents per pound in early trade."Good weather to start the US growing season and comfortable world grain reserves (for now) have played a role in seasonal selling," agricultural data provider DTN said.The lack of Chinese purchases also weighed on demand sentiment, with buyers likely waiting for a price drop to match cheaper offers from Brazil, according to Dave Chatterton of Strategic Farm Marketing, as cited by AgWeb.Prices will continue to fall if China pushes back its purchases to August, Chatterton reportedly said, adding that the Chinese soybean market is also showing signs of weakness.Price reporting agency MySteel echoed the same observations, noting that soybean supply in China remains ample and soybean oil inventories continue to buildup.In the US, soybeans inspected for exports dropped to 398,186 metric tons in the week ended June 4, versus the previous week's 505,109 mt and last year's 558,910 mt, data from the US Department of Agriculture showed.For the current marketing period, soybean inspections totaled 36.1 million metric tons, down significantly compared with the previous season's 45.2 mmt.Argentine cargoes are also expected to compete with US soybeans, especially once the government implements lower export taxes next year.Tax rates will gradually decline beginning January 2027 at a monthly rate of 0.25% to 0.50%, to reach 21% by the end of 2027 and 15% by the end of 2028, relative to 24% currently.In Asia, Malaysian palm oil futures slipped about 1% on Tuesday amid cautious trading ahead of the release of the Malaysian Palm Oil Board's monthly report.Lower crude oil prices also weighed on prices, with the Bursa Malaysia Derivatives' July and August crude palm oil contracts dropping to more than one-week low at 4,494 Malaysian ringgit ($1,104.20) per metric ton and 4,528 ringgit/mt, respectively.Ahead of the MPOB data expected on June 10, a Reuters survey showed that domestic stocks rose for a second straight month in May, due to lower exports. Cargo surveyors reportedly estimated an 8.8% to 15.5% month-over-month decline in shipments during the period.The latest industry data are expected to drive palm oil price movement. Market observers cited by Bioenergy Times said immediate reaction will depend on how closely the industry figures match with estimates.Tighter stock levels could trigger additional buying, while higher supply could facilitate profit-taking, traders reportedly said.In Indonesia, the government reportedly issued technical regulations regarding its single-gate export system for palm oil, coal and ferroalloys.Effective from June 1, the new export policy requires exporters to report relevant activities to a state-owned entity. For the palm oil sector, the scope reportedly includes crude palm oil, refined, bleached and deodorized palm oil, refined, bleached and deodorized palm olein, and palm oil residues.In the US, July ethanol prices on the NYMEX retreated 0.64% to about $1.93 per gallon on Monday.