BEIJING: Chicago soyoil futures rallied to a five-week peak on Friday and were on course for a 9.9% weekly jump, following expectations of President Joe Biden’s administration releasing short-term guidance on clean fuel tax credits.
Soybean and corn prices rose and were headed for weekly gains as traders adjusted positions ahead of the US Department of Agriculture’s (USDA) supply-and-demand reports, with weather concerns in South America continuing to impact prices.
Wheat prices slipped as traders struggled to find bullish drivers, with a stronger US dollar adding pressure.
The most-active soybean oil contract for March delivery on the Chicago Board of Trade (CBOT) added 2.55% to 43.85 cents per pound, up for a fifth session to its highest since Dec. 6, 2024.
The rally was fuelled by talks that incentives for importing used cooking oil (UCO) would end and credits for soybeans would ease, traders said.
The tax credits, vital to Biden’s sustainable aviation fuel goals, remain dormant due to a lack of US Treasury guidance. Biofuel companies and supporters now await Donald Trump’s stance on the upcoming guidelines. Chicago soybean rose 0.08% at $10.00 a bushel by 0408 GMT.
For the week, the contract has risen 0.8%, up for a third week. Chicago corn gained 0.16% to $4.56-6/8 and was set for a 1.3% weekly rise - its seventh weekly gain in eight weeks.
Rains are needed to refresh Argentina’s parched soy and corn crops, the Buenos Aires Grain Exchange said.
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It is expected to rain within the next week after weeks of hot and dry weather. Wheat fell 0.09% to $5.34 a bushel, but was set for a 0.8% weekly rise.
The dollar looked to extend its longest weekly winning streak in over a year, underpinned by rising bond yields and expectations of another strong set of US jobs numbers.
Analysts expect US wheat sales for the week ending Jan. 2 to range from 150,000-500,000 metric tons, corn from 700,000-1,400,000 tons and soybeans from 400,000-1,300,000 tons.
The USDA export sales report is due on Friday.
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