Soybean Oil Futures Set New Post-Pandemic High on Soy Buying

Soybean oil futures jumped sharply on Wednesday as the selling pressure in the soybean complex on Tuesday was reversed, with soybean prices rising about two percent. The Malaysian market was closed in observance of a holiday, but will likely play catch up when trading resumes overnight.

Crude oil prices also traded sharply higher, with West Texas Intermediate (WTI) contracts rising about five percent on short covering following bullish data released on Wednesday from the American Petroleum Institute (API). The advance left the benchmark October contract back above $40 per barrel and, given the relative outperformance relative to soybean oil, narrowed the spread (HOBO) between the two commodities. A narrower spread suggests biodiesel production using soybean oil is more profitable for producers. Soybean oil…