Political Tension Trigger Selling in Vegetable Oils

Vegetable oil prices were mixed on Wednesday as an overnight increase in political tension between the United States and Chinese governments triggered selling across the soybean complex. The selling erased overnight gains as soybean oil futures dropped 2 3/4 percent following the news that the United States government ordered the immediate closure of a Chinese embassy in Houston. Continuing concerns about palm oil output continued to support palm oil prices, despite an overnight decline in crude oil prices following bearish inventory data. Crude oil prices rallied during U.S. trading hours to settle above $42 per barrel for the first time since the coronavirus pandemic drove prices lower.

Soybean oil futures settled about 1/2 percent lower (September contract -14 basis points), but the September contract held above the…