Vegetable Oil Markets Consolidating Ahead of Golden Week

Vegetable oil prices dropped sharply on Tuesday as liquidation by Chinese speculators ahead of the Golden Week holiday, and weakness in soybean prices outweighed relatively bullish fundamentals. Concerns about a lack of Chinese demand following the Golden Week holiday and faster-than-expected U.S. harvest progress for soybeans also weighed on prices. Crude oil prices also fell sharply during U.S. trading hours, adding marginal pressure on prices. The benchmark November West Texas Intermediate (WTI) contract fell about four percent. It settled back below $40 per barrel following renewed fears about a second wave of the pandemic due to rising positivity rates in New York.

Nearby soybean oil futures fell about 1 1/4 percent (December contract -42 basis points per pound). However, the declines in deferred contracts…