Mumbai, 03 Dec (Commoditiescontrol): Chicago Board of Trade (CBOT) soy oil futures closed lower on Monday, weighed down by record soybean crush data, favorable weather in South America, and significant fund-long liquidation. The USDA’s latest report further pressured the market by revealing a sharp decline in soybean oil consumption for biodiesel feedstock. Soy oil consumption in September dropped to 1,076 million pounds, down from 1,217 million pounds in August.
The most-active CBOT soy oil futures fell 0.32 cents to settle at $41.42 per pound. Pressure also extended from U.S. soybean futures, which declined as projections for a record Brazilian soybean harvest gained momentum, supported by favorable weather conditions across South America.
In its Fats & Oils report, the USDA reported U.S. soybean crush volumes reached an all-time high of 215.76 million bushels in October, surpassing market expectations of 210.9 million bushels. This represents a 15.7% increase from September and a 7.15% rise year-over-year. Soybean oil stocks for October totaled 1.485 billion pounds, marginally higher than both the previous year and the prior month, underscoring an oversupplied market.
Adding to the bearish outlook, the latest CFTC report showed managed money reducing their net long positions in soy oil futures by 32,866 contracts during the week ending November 26, bringing their total positions down to 23,193 contracts. This liquidation has amplified downside pressure on prices.
Globally, Malaysian crude palm oil (CPO) futures also weakened, snapping a five-day rally. The benchmark February contract on the Bursa Malaysia Derivatives Exchange dropped 1.24% to close at 4,958 ringgit ($1,112.41) per metric ton, driven by weaker soy oil prices in Chicago and Dalian, alongside lower November export figures. On the Dalian Exchange, the most-active soy oil contract fell 0.98%, while palm oil gained 1.31%. In contrast, January canola futures defied the trend, rising $7.50 to settle at $581.60 per metric ton, supported by speculative buying.
Looking ahead, soy oil prices are likely to remain under pressure due to continued fund liquidation, weak crude oil prices, and rising U.S. supplies. The market is expected to remain well-supplied in the coming months, with Brazil's soybean harvest starting in late January and Argentina's in early April. Uncertainty over soy oil demand as a biodiesel feedstock adds to the bearish tone, keeping prices subdued. However, firm palm oil prices and tight supplies of mustard seed oil and sunflower oil may provide some support, limiting further downside in the market.
(By Commoditiescontrol Bureau: 09820130172)
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