According to Jim Wykoff, writing on, “March soybean oil futures at the Chicago Board of Trade are presently in a strong three-week-old price down-trend on the daily bar chart. Prices have sold off sharply, scoring a fresh 2.5-month low on Tuesday, after hitting a fresh seven-month high of 41.91 cents a pound in early January.”
Factors in the market to be considered are as follows:
  • According to The Refined Oils Weekly Wire, published by Bunge for its customers, “corn planting progress came in at 93% and beans at 53%, both still in at a good pace. Corn conditions came in as favorable, 71% of corn is in “good to excellent” condition. Beans are 53% planted and should make great progress again next week. Weather is siding with the farmer as hot, “greenhouse” like conditions will promote growth.”
  • The Hightower Report reported this morning that “The House has passed the bill on a retroactive tax credit of $1:00 per gallon for biodiesel and the bill now goes to the Senate.” The Bill will be considered on June 7th. Refined Oils weekly believes that “it’s looking a bit more likely that it will pass.”
  • Hightower also points out that “there are still no signs that China officials will loosen the rules to allow import of Argentinean soybean oil as the dispute continues.”
  • The European economy continues to struggle dramatically adding pressure to our markets.

Jim Wycoff, cited above, believes that, “soybean oil traders will continue to keep one eye on the crude oil futures market. Crude is an important "outside market" that has had a strong influence over the bean oil market. Crude oil's recent sell off has helped to press soybean oil futures lower.”

So what can we make of all this? The downward pressure caused by the European financial crisis is not expected to go away any time soon. Whilst some upward pressure might result from the China / Argentina dispute, more downward pressure should be anticipated with the expected passing of the biodiesel blender’s tax credit and the anticipated bumper corn and beans crop. According to, “in the long term perspectives prices are expected to move southwards on account of huge stock of imported edible oil this year as compared to last year and decision of continue to import of crude edible oil at 0% also in favor of bears in the market.” Expect more downward movement in the coming weeks.
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