GRAINS-Soybeans climb, soyoil soars daily limit on US biofuel proposal

By Julie Ingwersen

CHICAGO, June 13 (Reuters) - U.S. soyoil futures surged their daily limit on Friday and soybeans hit a three-week high after President Donald Trump's administration proposed biofuel blending requirements that were above trade expectations, analysts said.

Chicago Board of Trade corn futures followed soybeans higher and CBOT wheat rose about 3%, but still ended lower on a weekly basis.

CBOT July soybeans SN25 settled up 27-1/2 cents at $10.69-3/4 per bushel. July soyoil BON25 settled up 3 cents, its maximum daily limit, at 50.61 cents per pound, and traders said the contract was priced synthetically, through options, about half a cent higher at the close.

CBOT July corn settled up 6 cents at $4.44-1/2 a bushel and July wheat WN25 finished up 17-1/4 cents at $5.43-3/4 a bushel.

The CBOT said it would expand daily limits for soybean, soyoil and soymeal futures for Monday's trading session, with the soyoil limit widening to 4.5 cents per pound.

Soyoil, a key feedstock for biodiesel fuel, rocketed higher after the U.S. Environmental Protection Agency proposed to increase the amount of biofuels that oil refiners must blend into the nation's fuel mix over the next two years.

"Just coming in with these volumes ... is extremely positive for our domestic (soybean) crush demand for 2026 and '27. It's a big deal," said Terry Linn, analyst with Chicago-based Linn & Associates.

The EPA's proposed moves also included measures to discourage biofuel imports.

"The knee-jerk reaction ... is that domestically produced soybean oil is going to have to account for a much larger portion of feedstocks used in renewable diesel production in the US going forward," said Randy Mittelstaedt, analyst with R.J. O'Brien.

A jump in crude oil prices CLc1 after Israel conducted strikes on Iran lent early support to commodities, before the EPA news ignited the soyoil rally.

Corn futures followed soybeans and wheat higher, but benign U.S. crop weather favored crop development and kept a lid on rallies.

Analysts said the EPA's biofuels proposal would have little impact on demand for corn-based ethanol, given that the government left its proposed volume requirements for conventional ethanol unchanged for 2026 and 2027.

Wheat rallied from a four-week low set early in the trading session. However, for the week, the CBOT July WN25 contract ended down 11 cents a bushel, or 2%, amid seasonal pressure from the start of the Northern Hemisphere winter wheat harvest.

Commodity funds hold a sizable net short position in CBOT wheat futures, leaving the market vulnerable to short-covering bounces.