Crude Sell Off Triggers Profit-Taking in Vegetable Oils

World vegetable oil prices declined on Thursday as falling crude oil prices triggered profit-taking after the recent run-up in prices. Crude oil fell after U.S. inventory data indicated larger-than-expected stocks. It was the second consecutive day of declining crude prices after prices rallied sharply following the expiration of the March contract.

Soybean oil futures ran into resistance at the upper Bollinger band but found support at the 10-day moving average to settle down about 3/4 percent (July contract -21 basis points). It was the first day prices moved lower in the last three, but the most actively traded contract remained in the upper end of the recent trading range. The decline in crude oil prices has widened the spread between soybean oil and heating oil over the last couple of days, which could slightly reduce the demand from biofuel producers. However,…