Financial Times notes that China’s growing appetitite for soybeans (it is the world’s largest buyer), which are crushed into vegetable oil and also into livestock meal, coupled with droughts in both Brazil and Argentina (the world’s second and third largest exporters) and dwindling inventories in the U.S. (the world’s largest) are causing a price spike in the old crop. The new crop, however, which will be harvested in November, is expected to be a bumper harvest, meaning that while the crop’s current steamroll may still have a bit more pace to it, prices should ultimately wane. Likewise, the rise in the price of palm oil, another source of vegetable oil, which is increasing in the short-term (up 60% YTD) thanks to decreasing inventories in Malaysia, its largest exporter, should converge back to the mean as supplies have a chance to react.