Fund Spreading Supports Nearby Vegetable Oil Contracts

Vegetable oil futures were mixed on Tuesday as nearby soybean oil prices rallied on bull spreading by funds while palm oil futures remained narrowly mixed. Weakness in energy prices continues to weigh on palm oil values, despite a more bullish outlook for exports in December, with West Texas Intermediate (WTI) prices down 4 1/2 percent ($2.22 per barrel) in the last two days. Concerns about a new strain of the coronavirus have driven the selling in the energy markets, stopping the benchmark WTI contract just short of the psychologically critical $50 level. A sharp rally in soybean futures has supported soybean oil prices, particularly at the front end of the curve, with the most actively traded contract rising to test the 40-cent level on Tuesday.

Nearby soybean oil futures gained more than one percent (March…