European Lockdown Fears, WTI Collapse Sends Soy Oil Spiraling Lower

European Lockdown Fears, WTI Collapse Sends Soy Oil Spiraling Lower

Vegetable oil prices were lower on Friday, as funds booked profits and sold long oil share positions ahead of the weekend. Energy and agricultural markets were under pressure early in the day on news that Austria will reimpose a nationwide lockdown on November 22 due to rising Covid-19 cases. This stoked fears that other countries like Germany could follow suit as new infections increase across Europe, impacting the global economy as well as demand.

Soybean oil futures also retreated as the U.S. dollar strengthened and energy prices collapsed. West Texas Intermediate (WTI) December futures crumbled 3.7 percent at the close ($2.91 per barrel) to $76.10 per barrel. Apart from the Covid-19 resurgence in Europe, speculation that both the U.S. and China could release crude oil reserves to help ease prices continued to weigh on prices.

As WTI prices tumbled and bean meal futures advanced, funds started to liquidate long oil share positions. The meal/oil share spreading left…

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