Sharp Drop in Soybean Futures Drives Soybean Oil Lower

Soybean oil prices fell sharply on Monday as a sharp decline in soybean futures, and fund spreading drove steady selling throughout the U.S. session. Weakness in palm oil prices during the overnight session also contributed to the bearish tone. Bearish cargo surveyor data caused the decline in palm oil futures despite a rally in vegetable oil prices on the Dalian exchange.

Nearby soybean oil futures declined by about 2 1/2 percent (January contract -94 basis points per pound), but the drop in deferred contracts was smaller (January 2022 contract -65 basis points). An improvement in the outlook for South American growing conditions triggered liquidation in soybean futures, which settled about two percent lower following the largest daily decline in the continuous most actively traded contract since October 12. In addition to profit-taking, technically-driven selling also…