Chicago | Reuters — 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 U.S. biofuel targets, traders said.
The most-active July 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 in the July contract.
Soybeans had reached their highest price since late July on Wednesday, buoyed by a de-escalation in the U.S.-China trade dispute and optimism about continued U.S. tax credits for biodiesel fuel.
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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.
July soybeans finished 26-1/2 cents lower to $10.51-1/4.
Optimism over a temporary truce in the U.S.-China trade war, meanwhile, has subsided as analysts await more details on the ongoing negotiations.
On Wednesday, agribusiness consultancy AgResource estimated U.S. soybean exports may drop 20 per cent and that prices will plunge if the U.S. and China fail to resolve their trade dispute.
CBOT July corn closed three cents higher to $4.48-1/2, though back-month contracts settled lower under pressure from ideal planting and growing conditions in the U.S. corn belt.
July CBOT wheat ended up eight cents to $5.32-3/4 a bushel as low prices triggered a swell of buying demand for cheap U.S. wheat.
Export sales of wheat in the week ended May 8 totalled 804,800 metric tons, according to the U.S. Department of Agriculture, on the higher end of analyst expectations.
A U.S. crop tour in Kansas this week has pointed to above average yields in the country’s biggest wheat-producing state.
