USDA Data Drives Soybean Oil Prices Sharply Higher

Vegetable oil markets were higher on Wednesday, but soybean oil prices soared, with the nearby contract nearly locking limit-up at the close. If it had, it would have been the fifth day in the last eight that the contract moved higher or lower by the daily limit of 2 1/2 cents. The catalyst for the move on Wednesday was the United States Department of Agriculture’s (USDA’s) lower-than-expected prediction of U.S. soybean planting intentions. USDA projected the U.S. soybean area at 87.6 million acres, up 4.5 million from the 83.1 million planted last year, but 2.4 million acres below market expectations. The acreage projection suggests soybean inventories will remain tight through the 2021/22 marketing year, driving soybean and soybean meal contracts to lock limit-up for much of the session after USDA released the data at 11 a.m. (CST).