U.S. Soybean Futures Reach 20-Month High Amid Biofuel Demand Hopes

Chicago, February 26 - U.S. soybean futures surged to their highest level since mid-2024, driven by hopes for increased U.S. biofuel demand and Chinese imports. However, the market reversed course in a profit-taking retreat, with Chicago Board of Trade May soybeans declining by 8-1/2 cents to $11.56-1/4 a bushel.

The rally in soybean futures was supported by news that the U.S. Environmental Protection Agency would send its proposal for new biofuel blending mandates to the White House, with an expected final rule by the end of March. Additionally, a Reuters report indicated that the U.S. government plans to reallocate at least 50% of exempted biofuel blending obligations to big refiners, known as small refinery exemptions, or SREs.

Soyoil futures continued their upward trend, reaching the highest level since mid-September 2023, as both markets gained on the news of the proposed biofuel blending mandates. Dan Basse, president of AgResource Co., noted that a reallocation of SREs would lead to greater biofuel demand.

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In contrast, corn futures declined due to profit-taking and technical selling, as well as a drop in weekly U.S. corn export sales to the lowest in seven weeks. May corn fell by 1-1/4 cents to $4.40-3/4 a bushel.

Wheat futures, however, firmed after three sessions of losses, with CBOT May wheat rising by 3-3/4 cents to $5.73-1/2 a bushel. The upward momentum in wheat futures was driven by a rebound from a three-month peak at the start of the week.