CHICAGO: Chicago soybean futures on Thursday plummeted from the previous session’s 10-month high, pressured by a sharp drop in soyoil caused by concerns over US biofuel targets, traders said.
The most-active soyoil futures on the Chicago Board of Trade fell to their daily limit, at 49.32 cents per pound. That pushed soybeans, which are crushed to produce soyoil and soymeal, down to a low of $10.46-3/4 per bushel.
Soybeans had reached their highest price since late July on Wednesday, buoyed by a de-escalation in the US-China trade dispute and optimism about continued US tax credits for biodiesel fuel. Concerns over biofuel policy, however, have re-emerged since Wednesday, with rumours that a target for renewable diesel volumes under discussion for next year will come well below the 5.25 billion gallons proposed by an alliance of oil and biofuel producers.
“It was disappointing for people who were banking for a bigger number,” said Terry Linn, vice president of Linn & Associates. CBOT soybeans were down 29-3/4 cents to $10.48 per bushel at 11:00 a.m. CDT (1600 GMT).
Optimism over a temporary truce in the US-China trade war, meanwhile, has subsided as analysts await more details on the ongoing negotiations.
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