Refiners' profit margins, measured by the "crack spread," have contracted for the fifth week running. Basis the April/May refining cycle, the spread stood at $26.66 a barrel, or 8.5% on Wednesday's close. At the beginning of the year, with feedstock West Texas Intermediate crude testing $99, refiners were snagging a gross profit margin of $43.67 a barrel, or 14.7% (three barrels of crude can be distilled into two barrels of gasoline and one barrel of heating oil by many refiners).

Yesterday, the entire energy complex sold off hard, driven by funds' defensive liquidations and rising U.S. crude inventories. April crude weakened $4.09 a barrel, or 3.8% over the week to $104.48, while gasoline and heating oil for May delivery slid 6.3% and 0.5% respectively.

Follow-through selling in today's market is riding on nascent sentiment in some foreign exchange circles of a bottoming in the dollar/yen and dollar/loonie crosses.

The processing of edible oil brought in less profit this week as well. On Wednesday, soybeans and soybean oil closed limit down, reacting to Asian market weakness and fund selling. Soybean meal also sold off dramatically. For the week, bean and product prices sagged about 10%, pinching producers' profit margins by 11 cents a bushel. For the November/December crush, gross margins stood at 74 cents a bushel, or 6.2%.

Squeezing Fewer Dollars Out Of Commodities