...MOREWant to know what is going to happen to crude oil prices?Just look at values of the likes of palm oil and soyoil, according to Erik Norland, senior economist at CME Group.While crude has a reputation for being a leader of raw materials, the commodities queen, it is actually a follower in prices terms of what goes on in markets for edible oils, from which biodiesel is made.'People have it backwards'Comparison of price charts shows that soyoil "peaked before crude oil in 2008, it bottomed out before crude in 2009," Mr Norland said."It peaked again before crude oil in 2011, and preceded the collapse more recently.""I think people have it backwards," Mr Norland told Agrimoney LIVE."I think crude oil traders should be looking at biofuel markets, rather than the other way round."Reason behind the dynamicAnd there is a fundamental reason why edible oil markets, via biodiesel, might be price leaders, Mr Norland added."It is fairly simple. When markets perceive there is too much fuel around, the first thing they push back on is biofuel."When crude is scarce, they become very enthusiastic for biofuels....
Tuesday, May 23, 2017
"Vegetable oil markets hold secret to crude oil values, says CME expert"