BEIJING: Chicago soyoil futures surged to their highest level in nearly 18 months, buoyed by higher-than-expected biofuel blending proposals and a rally in crude oil prices amid escalating conflict between Israel and Iran.
The most-active soyoil contract on the Chicago Board of Trade jumped 4.58% at 52.93 cents per pound, as of 0134 GMT, its highest since December 20, 2023.
Soyoil, a key feedstock for biodiesel fuel, gained support after the US Environmental Protection Agency proposed last Friday to increase the amount of biofuels that oil refiners must blend into the nation’s fuel mix over the next two years.
The proposal exceeded trade expectations. Rising crude oil prices also lifted soyoil, as higher energy costs typically make biodiesel more competitive.
Oil extended Friday’s rally, as renewed strikes by Israel and Iran over the weekend increased concerns that the battle could widen across the region and significantly disrupt oil exports from the Middle East.
Soybean fell 0.26% to $10.67 per bushel, retreating from a three-week high hit last Friday. Weak demand, abundant global supplies and continued tariff uncertainty remain a drag on prices.
Wheat dipped 0.74% to $5.39-6/8 a bushel amid seasonal pressure as the Northern Hemisphere’s winter wheat harvest gets underway. Corn dropped 0.45% to $4.42-4/8 a bushel, weighed down by favourable weather forecasts for crop development in the US corn belt.
Traders are awaiting updated weekly crop ratings due later on Monday from the US Department of Agriculture.
Commodity funds were net buyers of CBOT soyoil, soybean, wheat and corn futures contracts on Friday and net sellers of soymeal futures, traders said.
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