Supply Concerns Drive Vegetable Oil Prices Higher

World vegetable oil prices jumped sharply on Thursday as concerns about a slowdown in soybean oil shipments out of Argentina and higher energy prices contributed to the bullish tone. Vegetable oil traders remain focused on developments at a crushing facility in Argentina, which shut down on Wednesday. If the facility remains closed for an extended period, it could slow shipments from the World’s largest exporting country. However, the shutdown occurred when crushing volumes are near seasonal lows, which should mitigate the impact of a short-term closure. West Texas Intermediate futures bounced off the critical $40 per barrel level to rise by about 1 1/2 percent.

Nearby soybean oil futures gained about 1 1/2 percent (December contract +49 basis points per pound), but deferred contracts rose less (December 2021 contract…