Soybean Oil Prices Climb on Oil/Meal Spreading, Palm Oil Sinks

Vegetable oil prices were mixed on Wednesday, with the overbought palm oil market sharply lower but soybean oil slightly higher on fund oil/meal spreading. Nearby soy oil futures increased more than 2/5 percent (August contract + 29 basis points per pound), with the advance underpinned by weather models that suggest the ridge in the northwestern Midwest and northern Plains will extend into next week. However, the near-term forecasts also indicate increased chances of rain remain for most other areas of the Corn Belt over the same period, which kept a lid on the upside. At the back end of the forward curve, all contracts saw slightly sharper gains but were up less than one percent as well (October 2022 contract +56 basis points per pound). The August/December spread, which rallied 42% on July 27, lost six percent to 3.15 cents.

Following a three-day rally that drove the benchmark contract more than seven…