BEIJING: Chicago soybean futures slipped from near 10-month highs on Thursday, weighed down by a sharp drop in soyoil as falling crude oil prices and mounting uncertainty over the U.S. biofuel policy pressured the market.
Soyoil futures dropped 5.18% to 49.61 cents per pound, the steepest daily decline since June 2023, partly due to weaker crude oil prices following a surprise U.S. inventory build and renewed hopes for a U.S.-Iran nuclear deal.
Soybeans slipped 0.93% to $10.68 per bushel, snapping a five-session winning streak. The market had drawn support from a Monday proposal to extend the biofuel tax credit (45Z), which underpins demand for soyoil in renewable diesel production.
Shifting expectations about U.S. biodiesel policy have disrupted the soyoil market, with rumours of lower-than-expected target for biomass diesel mandates and delays in biofuel tax credit rule-making adding to market uncertainty.
Optimism over a temporary truce in the U.S.-China trade war lent some support to soybean prices, but traders and analystswarned of uncertainty ahead of the U.S. marketing season.
On Wednesday, agribusiness consultancy AgResource warned U.S. soybean exports may drop 20% and that prices will plunge if the U.S. and China fail to resolve their trade dispute.
Soybeans, corn up on US-China trade optimism; wheat flat
Corn rose 0.34% to $4.47 per bushel, supported by concerns about potential unfavourable weather during the U.S. summer.
In rival supplier Brazil, 2024-25 corn output is estimated to be about 125 million metric tons, according to the Brazilian Association of Corn and Sorghum Producers.
Wheat rose 0.57% to $5.27-6/8 a bushel, stabilizing after hitting its lowest in nearly five years on Wednesday.
“Wheat is just stabilising after a big run-up overnight, said Ole Houe, director of advisory services at IKON Commodities in Sydney, adding that prices will likely strengthen further due to dryness concerns in hard red winter wheat growing areas.
Traders are awaiting the U.S. Department of Agriculture’s weekly export sales report, due later in the day.
Commodity funds were net buyers of corn, wheat, soybean and soyoil futures contracts on Wednesday, traders said. They were net sellers of soymeal futures, traders said.
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