Even with the U.S. soybean crop off to a great start, soybean oil futures soared last week, closing above 70 cents per pound on Wednesday, Jun. 2, and helping keep soybean futures elevated in the mid-$15 per bushel range. The soybean oil rally continued through the week with July futures trading at their highest level, 72.13 cents, on Thursday and settling at 71.34 cents on Friday.
Looking at soybean crop development, plantings remain ahead of trend at 84 percent planted vs. 67 percent for the five-year average, week or more ahead of the typical pace. Plantings will likely wrap up very soon thanks to the dry weather anticipated. The first crop ratings for soybeans will be released next Monday, Jun. 7. No precipitation is forecast for this region over the next week, which is supporting grain prices.
USDA is forecasting soybean oil production in 2021/22 at 25.9 billion pounds, up just 1.5 percent from this season.