World Vegetable Oil Prices Continue to Rally on Gains in Crude and Buying Across Agricultural Commodities

A continued bounce in crude oil prices drove world vegetable oil prices higher for the third consecutive day. West Texas Intermediate crude oil prices have almost doubled from a recent bottom on set Tuesday night, and that move has supported vegetable oil markets. The direction of crude oil prices will likely continue to drive vegetable oil markets. However, given that the spread between vegetable oils and heating oil has risen sharply in recent weeks. The relative move for vegetable oil prices needs to be substantially smaller than the gains in crude oil to drive a return in demand from biofuel producers and sustain the progress higher in vegetable oils.

Soybean oil futures gained about 1 1/2 (July contract +43 basis points per pound), supported by buying across…