Risk-Off Selling Drives Soybean Oil Prices Sharply Lower

Soybean oil futures plunged on Wednesday as “risk-off” selling across all asset classes triggered a wave of profit-taking in the soybean complex. Profit-taking also weighed on nearby palm oil prices, but deferred contracts were higher, reflecting the market’s underlying fundamentals. Crude oil prices also fell sharply, with the benchmark West Texas Intermediate (WTI) contract down 5 1/2 percent. The decline left the benchmark contract well below the psychologically critical $40 per barrel level and just above the recent low set in early October. In addition to the cross-asset selling, inventory data published Tuesday night also weighed on energy values.

Soybean oil prices dropped about two percent (December contract -69 basis points per pound). Buying at the 50-day moving average limited the decline, leaving the…