Soybean Oil/Palm Oil Spread Hits Parity on Mixed Markets

Vegetable oil prices were mixed on Thursday as continuing concerns about palm oil production drove prices higher, while fund spreading and weakness in crude oil weighed on soybean oil prices. Crude oil futures rallied in the overnight session, but selling at the upper Bollinger band triggered profit-taking that sent prices sharply lower by the end of trading. Crude fell almost $1.50 per barrel from the overnight highs to the lows set at the close of agricultural trading. The announcement that the Chinese government would close a U.S. embassy in response to the U.S. government’s closure of the Chinese embassy in Houston earlier in the week triggered the weakness. The announcement also led to a broad sell-off in equity markets.

Soybean oil futures fell about 1/2 percent (September contract -15 basis points per…