GRAINS-Soyoil hits 20-month peak, corn falls on good crop weather

By Julie Ingwersen

CHICAGO, June 16 (Reuters) - U.S. soyoil futures hit their highest in 20 months on Monday, supported by U.S. biofuel blending proposals that are likely to increase demand, while soybean futures touched a one-month high.

Corn and wheat futures fell on strong production prospects.

As of 12:45 p.m. CDT (1745 GMT), Chicago Board of Trade July soyoil BON25 had climbed its daily limit, which was expanded by the exchange for Monday's session from 3 cents to 4.50 cents, reaching 55.11 cents per pound. That price was the highest on a continuous chart of the most-active soyoil contract since October 2023.

CBOT July soybeans SN25 were up 1-3/4 cents at $10.71 per bushel after hitting $10.79-1/4, the contract's highest since May 14. July corn CN25 was down 9-1/4 cents at $4.35-1/4 a bushel and July wheat WN25 was down 7-1/2 cents at $5.36-1/4 a bushel.

Soyoil futures plowed higher after the U.S. Environmental Protection Agency on Friday proposed larger-than-expected biofuel blending targets. The government also included measures to discourage biofuel imports.

The soy complex got another boost on Monday when the National Oilseed Processors Association said its U.S. members processed 192.829 million bushels of the oilseed last month, slightly below trade expectations but the largest May crush ever and the eighth-largest for any month on record.

"The current spike in soyoil prices helps to boost crush margins, which should help to rejuvenate the crush industry in light of Friday's updated EPA biofuel mandate announcement.

NOPA said soyoil stocks among its members as of May 31 dropped to 1.373 billion pounds, a bigger drop than most analysts expected.

Meanwhile, benign U.S. crop weather signaled strong harvest prospects that kept a lid on CBOT corn and soybean rallies.

Ahead of a weekly crop progress report due later on Monday from the U.S. Department of Agriculture, analysts surveyed by Reuters on average expected the government to rate 71% of the U.S. corn crop and 68% of the soybean crop in good to excellent condition, unchanged from last week.

The U.S. harvest of winter wheat is expanding after a slow start. Analysts on average expected the USDA to show the harvest as 11% complete, up from 4% last week.