Vegetable Oil Prices Rally Sharply

Vegetable oil markets surged higher on Tuesday as Malaysian currency weakness supported palm oil prices and a rally in crude oil prices during U.S. trading hours contributed to gains in soybean oil. Buying across the soybean complex also helped soybean oil prices. West Texas Intermediate (WTI) futures jumped back above $40 per barrel shortly after the U.S. open and rose to stay above $41 late in the morning. If this is the beginning of a new rally in crude prices, it will support vegetable oil markets in the short term.

Soybean oil futures rose 1 1/4 percent (September contract +38 basis points per pound) to leave the benchmark December contract just above the psychologically crucial 29-cent level. Technical support at the 10-day and 20-day moving average combined with fund oil/meal spreading to support the move higher. It was the…