GRAINS-Chicago soybeans, corn climb after updated biofuels guidance

BEIJING, Feb 4 (Reuters) - Chicago Board of Trade soybean futures rose on Wednesday as market participants digested the U.S. Treasury Department's updated guidance on biofuel tax credits.

Corn and wheat also climbed.

FUNDAMENTALS

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was up 0.2% at $10.67-3/4 a bushel, as of 0210 GMT.

CBOT wheat Wv1 was up 0.5% at $5.31-1/4 a bushel and corn Cv1 rose 0.1% to $4.29 a bushel.

The Treasury on Tuesday issued a proposed rule governing how biofuel makers can access a $1-per-gallon tax credit for low-carbon transportation fuels, including aviation fuel.

The rule allowed for low-carbon fuel produced with feedstocks grown in Canada and Mexico as well and added tweaks to the methodology for calculating a feedstock's land use intensity.

The guidance gave clarity to biofuel producers, traders said. Biofuels are a major source of demand for soyoil and ethanol.

The long-awaited rule helped push soy and corn futures higher as the oilseed and the grain are used to produce soyoil ethanol, major biofuels.

However, ample global supply capped market gains.

Brazil's soybean production is expected to reach 181.6 million metric tons in 2025/26, consultancy firm StoneX said on Monday, raising its outlook by 2.3% from a January projection.

Brazil is also on track for ethanol production jump this year, analysts and commodities traders said on Tuesday.

Commodity funds were net buyers of corn, soybean, wheat futures on Monday, traders said.

MARKETS

DATA/EVENTS (GMT)

0850 France HCOB Composite, Services PMI Jan

0855 Germany HCOB Services PMI Jan

0855 Germany HCOB Composite Final PMI Jan

0900 EU HCOB Services, Composite Final PMI Jan

0930 UK S&P Global PMI: Composite - Output Jan

0930 UK Reserve Assets Total Jan

1000 EU HCIP Flash YY Jan

1000 EU HCIP-X F, E, A, T Flash MM, YY Jan

1445 US S&P Global Comp, Svcs PMI Final Jan

1500 US ISM N-MFg PMI Jan