CASH AND FUTURES PRICES of soybean oil climbed from late February into March and are now considerably above the weak levels seen early in the year.

One influence on the soybean oil market has been the increase in world prices of palm oil, the most widely traded vegetable oil, from late last year into 1992, as low rainfall cut production in Malaysia and Indonesia. Factors in the soybean oil market, including lower-than-expected Jan. 31 soyoil stocks in the United States and a greatly improved export pace, have underpinned prices. Values also have been bolstered by rising soybean prices, tied to active U.S. bean shipments to the former Soviets and others this winter, along with concerns that summer weather in the United States could be dry, reducing the bean crop.The U.S. soyoil market began the 1991-92 season in October with sizable inventories carried over from last year. As a result of heavy crushing to ship meal to the former Soviets, oil production has been strong and is expected to reach a record 13.96 billion pounds for the season. Total domestic soyoil supplies this year are forecast to be the largest ever.

Meanwhile, domestic demand continues to grow on an annual basis, and exports this season rebounded from last year's dismal level. In the U.S. Department of Agriculture's March 11 supply/demand report for soyoil, the domestic usage forecast was raised by 200 million pounds to 12.30 billion, as the trade had anticipated. The revision was signaled by the Census Bureau's February report showing soyoil stocks in all positions on Jan. 31 as nearly 7 percent below December's level, reflecting brisk demand. Soyoil, along with several other vegetable oils, has benefited from U.S. consumers' dietary reductions of animal fats, coconut oil and palm oil.

U.S. soyoil exports this season are slated to rise to 1.250 billion pounds

from a very weak 780 million pounds in 1990-91. Large sales to the Commonwealth of Independent States on credit terms and the U.S. Department of Agriculture's aggressive use of the Export Enhancement Program to sell soyoil to Algeria, Morocco, Tunisia, Turkey, China and other countries explain the increase. The commonwealth has $15 million in export credits for March to buy U.S. vegetable oils and it bought some sunflower oil this week.

In its March 11 report, the USDA reduced projected soybean oil stocks by 200 million pounds when the season ends in September because of the higher domestic use estimate. The carryout is now forecast at 2.2 billion pounds, still well above last year's inventories of 1.790 billion pounds and a record level. The prospect of higher stocks this season constrains the extent to which soyoil prices can rise now. USDA forecasts the average price of cash soyoil in Decatur this season at 18 to 21 cents a pound, which is up from February's estimate of 17.5 to 20 cents and compares with last year's 21 cents.

In the soybean market, Brazil is expected to harvest a large crop of 18.5 million to 19 million tons shortly. U.S. plantings this spring are likely to be lower than last year as producers expand corn area. Also, the weather outlook is uncertain, with some meteorologists expecting a dry, hot summer in the U.S. Midwest. The recently strong tone in the world lauric oils (palm and coconut oils) market and some of the positive fundamentals for soybeans point to still higher soyoil prices, though large domestic oil stocks will restrain the advance.