Soybean oil prices last week tumbled below 50c a lb, Decatur, Ill., for the first time since January. With the cash basis on soybean oil holding mostly steady for the past several weeks, the drop in soybean oil prices was tied to an unexpected and even breathtaking plunge in soybean oil futures prices that seemed to catch much of the trade by surprise. After all, just a few weeks earlier, users of soybean oil booked supply aggressively and extended contract balances to about 60 days when futures prices dropped to 54c a lb from 55c. That buy, which seemed entirely reasonable at the time, exposed purchasers to complaints they may have booked too soon. While some users took advantage of last week’s slump in futures prices to extend contract balances further, many did not, wary that soybean oil prices soon might decline further, perhaps to as low as 48c a lb, as some suggested. But merchandisers cautioned given the recently trimmed and tight soybean ending stocks forecast for the current year, at 210 million bus, and the U.S.D.A.’s first estimate of 2012-13 soybean ending stocks even tighter, at 145 million bus, the downside potential in the soy complex, including soybean oil, may be limited.

Soybean oil prices suffer-ed disproportionately from the recent downtrend in the soy complex. While the July soybean oil future dropped nearly 2c a lb last week, the July soybean meal future advanced about $9.40 a ton. The share in the value of the soybean crush held by soybean oil tumbled to about 37% toward the end of last week after trading in recent weeks at 43% and even higher. The oil share was around 45% at the beginning of the year, and was around 47% in late 2011.