Argentine Weather and Crude Rally Drive Soybean Oil Higher

Vegetable oil prices were generally higher on Friday, but once again, the gains in the soybean oil market were far more significant than in palm oil. At this point, the soybean oil market is basically dragging the palm oil market higher. Continued concerns about Argentine growing conditions triggered a sharp rally in soybean prices, combined with oil/meal spreading by the funds lifted soybean oil futures to fresh life-of-contract highs. However, unlike the last leg of the rally, the spreads in soybean oil narrowed, suggesting the price level is starting to impact the demand for soybean oil through the summer months.

The spread between the May soybean oil and palm oil contracts rose above 10 cents after breaking through resistance at nine cents on Thursday. The spread between the July contracts rose above 12 cents….