Soybean Oil Futures Rally on Fund Oil/Meal Spreading

Vegetable oil prices were mixed on Monday, with palm oil futures lower on profit-taking and soybean oil sharply higher on fund oil/meal spreading. Amid thin trading volumes, July soybean oil futures, which expire on July 14, ended more than four percent higher (+258 basis points per pound). Benchmark soybean oil futures prices settled almost 2 3/4 higher (August contract +170 basis points per pound). Gains were smaller for deferred soybean oil contracts in percentage terms (July 2022 contract +98 basis points per pound) thanks to bull spreading.

At noon (EST), the United States Department of Agriculture (USDA) released its latest monthly World Agricultural Supply and Demand Estimates (WASDE), but the data left the market non-plussed. USDA slightly lowered its prediction of soybean oil used in biofuel production in 2020/21 to 9.3 billion pounds but left its 2021/22 projection at 12 billion pounds. USDA…