Bounce in Soybean Futures Drive Gains in Soybean Oil

Soybean oil futures jumped sharply on Thursday despite disappointing weekly export sales data. A sharp rally in soybean futures and news that the Indonesian government would raise the tax rate on palm oil exports contributed to the bullish tone. Fund liquidation of short oil share positions also added to the gains, which left the benchmark contract well above the psychologically important 37-cent level. The continued decline in the value of the U.S. dollar also contributed to the soy complex’s strength, and gains in energy futures provided some of the outperformance of soybean oil versus the rest of the complex.

The United States Department of Agriculture (USDA) reported that soybean oil sales during the week ending November 26 totaled a marketing-year low of 2,500 tonnes. The total fell well below the lower end of…