Gains in Soybean Futures Drive Soybean Oil Prices Higher

Soybean oil prices rose sharply on Tuesday, supported by gains in soybean futures. Strength in energy prices offset weakness in soybean oil and vegetable oil futures on the Dalian exchange during the overnight session to help palm oil futures post narrow gains. It was the second consecutive day of lower prices in Chinese markets. It is too soon to know whether the record volume of soybean imports has allowed Chinese crushers to fill in the missing vegetable oil supply that has driven prices higher over the last several months. Cash vegetable oil prices remain elevated but have slowly trended lower over the last six weeks. If Chinese demand starts to slow and negotiators resolve the Argentine port strike, vegetable oil futures could come under pressure. However, relatively low palm oil inventories in Malaysia and growing demand from biomass-based…