Soy Complex Weakness Drives Soybean Oil Lower

Vegetable oil prices were mixed on Wednesday as weakness in soybean futures, and crude oil prices weighed on soybean oil futures, while bullish export news and robust demand from India supported palm oil prices. The moves narrowed the spread between the May soybean oil and palm oil contracts to less than 10 cents a day after the spread set a new high just below 11 cents. The July spread fell back below 11 cents. Despite the decline on Wednesday, the May spread continues to trade in the channel it has been in since bottoming just above five cents in early February. However, if soybean futures continue to move lower, the spreads will likely test the lower end of the channel and could move back toward the long-term average over the next several weeks.

The weakness in soybean oil futures also pushed the spread between soybean oil and…