Soybean Oil Falls Below 37-Cent Level on Soy Weakness

On Wednesday, funds liquidated a portion of the short oil share position they have built recently, but the continued decline in soybean futures still left most soybean oil contracts lower. A modest drop in palm oil futures provided some room for soybean oil prices to continue to move lower. Still, the spread between soybean oil and palm oil is at historically low levels, limiting the influence of the decline in palm oil futures on soybean oil values. A sharp rally in crude oil prices also helped limit the decline in soybean oil futures. However, the spread between soybean oil and heating oil (HOBO) values remains close to recent highs, so it would take a sustained rally in energy values before gains translated more directly to soybean oil prices.

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