Commodities
Biofuels Update: Chicago Soybean Complex Rises on Higher Crude Oil, Exports
The Chicago soybean complex firmed on Friday and was on track for a weekly gain, supported by higher crude oil prices and strong export demand.The August soybean contract on the Chicago Board of Trade inched up 0.19% to $11.97 per bushel, bringing weekly gains to 0.48%.The corresponding August soybean oil contract edged higher by 1.74% to 73.69 cents per pound and was set to climb 4.58% over the week.The US Department of Agriculture reported that, for the week ended July 9, net sales of soybeans for delivery during the 2026/27 marketing year stood at about 1.8 million metric tons. Of the total volume, more than 1mmt were sold to China.As for exports, data showed a total of 453,900 metric tons for the week, down 21% from a week earlier but up from the prior four-week average.Strong sales data boosted market sentiment further after reports showed that soybean crush volumes reached a record for the month of June at 214.3 million bushels and that soybean oil inventories dropped to an eight-month low at 1.5 billion pounds.In the near term, forecasts for improving weather conditions will largely influence price movements, with temperatures likely to moderate slightly next week.In Asia, Malaysian palm oil futures retreated on Friday as high inventories in Malaysia and Indonesia weighed on sentiment, although prices gained more than 1% over the week amid a strong global energy market that boosts biofuel competitiveness.The Bursa Malaysia Derivatives' August crude palm oil contract was down 0.18% to 4,529 Malaysian ringgit ($1,109.99) per metric ton. The September contract lost 0.20% to 4,565 ringgit/mt.Malaysian palm oil stocks grew to their highest level since March at 2.5 million metric tons in June, according to the Malaysian Palm Oil Board data, as an increase in output offset a rebound in exports.In Indonesia, May inventories reportedly rose 18.9% from a month earlier to 3.0 mmt, as exports slumped.Persisting high stocks in top producing countries are pressuring the market, according to Sunvin's commodity research head Anilkumar Bagani, as cited by Reuters. This indicates relatively weak demand at a time when production is seasonally high.Palm oil purchases by top importer India reportedly plunged to a 14-month low in June and declined 11% month over month, as demand weakened due to a narrowing discount of palm oil to other rival oils.In the EU, palm oil imports during the 2025/26 marketing year dropped around 5% to 2.9 mmt, after policy changes that excluded palm-oil based biofuels from tax incentives, Biofuels International reported.Despite these downsides, industry data showed that Malaysia's exports recovered 6.2% in June from a month earlier. Preliminary estimates by cargo surveyors also reportedly showed that shipments increased further between 4% and 12.4% in the first 15 days of July.The government has kept the export duty for crude palm oil at 10% in August, as the reference price rose to 4,412.19 ringgit/mt from the prior month's 4,346.79 ringgit/mt, according to a notification from the MPOB.Going forward, analysts expect that palm oil will remain supported as output tapers down seasonally toward Q4 and due to the El Nino weather phenomenon, while Indonesia's exportable supplies tighten due to the progressing B50 mandate.Meanwhile, August ethanol prices on the NYMEX slipped for a third straight session by a further 0.65% to $1.91 per gallon on Thursday, diverging from crude oil prices, due to weak exports and high inventories.