Soybean Rally Lifts Soybean Oil Futures

Reports of Brazilian planting delays and the strength in soybean oil prices on Monday propelled world vegetable oil futures sharply higher on Tuesday. The continuing recovery in energy prices also contributed to the bullish tone, but fund spreading limited the advance in the soybean oil market. West Texas Intermediate (WTI) futures gained about two percent, but resistance for the November contract at the psychologically critical $40 per barrel level limited the advance. Still, the rally has erased almost all of last week’s decline, and the benchmark December contract settled above the $40 level.

Soybean oil futures rose about 1 1/2 percent (December contract +53 basis points per pound), but gains in deferred contracts were smaller. The delays in Brazil drove nearby soybean futures…