Rally in Chinese Markets Drives Soybean Oil Futures Higher
Strength in Chinese vegetable oil prices continued to drive world vegetable oil futures markets higher on Tuesday. Palm oil and soybean oil prices rallied despite a decline in crude oil prices as cash prices in China reversed the recent trend and set new highs. It is hard to know exactly how big the hole is in the Chinese vegetable oil balance sheet, and the Chinese futures market is substantially more volatile than the Malaysian and U.S. markets. However, for now, the trend continues to be higher, and until that trend reverses, soybean oil and palm oil prices will remain well supported.
Soybean oil futures gained about one percent (December contract +37 basis points per pound) as overnight strength in vegetable oil markets triggered fund spreading. The move left the benchmark December contract at its highest…
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