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 ended lower on Thursday in a profit-taking dip after hopes for more U.S. biofuel demand and Chinese imports had pushed prices to their highest levels since mid-2024.

Corn futures followed soybeans lower, but rebounded to close higher on the day as a lower-than-expected weekly export sales tally failed to blunt recent demand optimism. Wheat firmed following three sessions of losses.

Chicago Board of Trade May soybeans SK26 ended down 1-1/2 cents at $11.53-1/2 a bushel 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 finalized 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 revealed 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 settled up 4-3/4 cents at $5.74-1/2 a bushel after retreating from a three-month peak at the start of the week.

May corn CK26 gained 1-1/2 cents to close at $4.43-1/2 a bushel. The contract slid from an early 1-1/2-month high after weekly U.S. data showed a drop in export sales to the lowest level in seven weeks.