GRAINS-Soybeans ease on profit taking after hitting 20-month peak on demand hopes

By Karl Plume

CHICAGO, Feb 26 (Reuters) - U.S. soybean futures rallied on Thursday to their highest since mid-2024 on hopes for more U.S. biofuel demand and Chinese imports before the market eased in a profit-taking retreat.

Corn futures also declined on profit-taking and technical selling, and as weekly corn export sales fell below trade expectations, while wheat firmed following three sessions of losses.

Chicago Board of Trade May soybeans SK26 were down 8-1/2 cents at $11.56-1/4 a bushel by 12:15 a.m. CST (1815 GMT) after the most-active contract Sv1 rose to the highest point in 20 months. Soyoil futures BOv1 rose for a fourth straight day and hit the highest level since mid-September 2023.

Both markets gained on news on Wednesday that the U.S. Environmental Protection Agency would send its proposal for new biofuel blending mandates to the White House, with an expected rule to be finalised by the end of March. The move brings the market closer to ending recent uncertainty over demand for biofuels and feedstocks like soy.

A Reuters report on Thursday that the U.S. government plans to reallocate at least 50% of exempted biofuel blending obligations to big refiners, known as small refinery exemptions, or SREs, lent further support.

"If we have a reallocation of 50% of SREs, that is important and would mean that there's going to be greater biofuel demand," said Dan Basse, president of AgResource Co.

Questions about soybean demand from top importer China amid tariff uncertainty and ahead of U.S. President Donald Trump's trip to the country this spring kept the market on edge.

CBOT May wheat WK26 was up 3-3/4 cents at $5.73-1/2 a bushel after retreating from a three-month peak at the start of the week. May corn CK26 was down 1-1/4 cents at $4.40-3/4 a bushel, dipping from a 1-1/2-month high after weekly U.S. data showed a drop in export sales to the lowest in seven weeks.