Bounce in Soybean Complex Drive Soybean Oil Higher

Soybean oil futures bounced following the sharp decline on Friday, supported by substantial gains in soybean futures. However, meal/oil spreading limited the gains. Still, the benchmark contract rose more than 1 1/2 percent (March contract +67 basis points per pound). Soybean oil futures have been trading in a range between 42 and 43.5 cents for most of the last two weeks. It is unclear whether soybean futures will continue to rally or whether improving growing conditions in South America, especially Argentina, will drive further liquidation. If soybean futures continue to move lower, soybean oil futures are likely to follow, at least in the short term. A drop through the psychologically critical 41-cent level would likely drive the benchmark contract down to test the 50-day moving average (39.82 as of Monday’s close). However, if the benchmark contract…