Bargain Buying Lifts World Vegetable Oil Markets

On Monday, technically-driven buying drove vegetable oil prices higher. However, soybean oil and palm oil prices remain well below recent highs following the sharp sell-off at the end of last week. In addition to the technically driven buying, oil/meal spreading also contributed to the gains in the soybean oil market. News that the Russian government would implement taxes on sunflower oil exports starting in September may have also contributed to the bullish tone. Position squaring will likely drive trading on Tuesday as traders look forward to the United States Department of Agriculture’s (USDA’s) reports on Wednesday for the near-term direction of the market.

The spread between the May soybean oil and palm oil contracts continued to narrow, falling below 10 cents for the first time since March 17. The July spread widened to…