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Backwardation in NWE Gasoil breaksdown $30/mt as flat price crashes 5%


Biodiesel premium move $75/mt higher in ARAG to +345 while Dec BOGO is +408. This is the narrowest spread we have seen in months btw FAME and BOGO. Backwardation in Biodiesel premium did not change much with FAME showing +8 through Q1 while just a week ago FAME was in contango all the way through Q2. The cheapest feedstock for winter Biodiesel at this moment in ARAG is Palm Kernel oil which at $905/mt which is $5/mt cheaper than Sunflower Oil. Rapeseed oil still is showing a $100/mt inverse/backwardation while flat price is $1134 and RME is $1405 or $271/mt margin. Nothing has really changed on logistics in Europe with navigation still seriously hampered by very low water levels way below 5-year average. Looks like a very confusing picture but truthfully there is plenty of Vegetable oil feedstock for biodiesel in the world right now and we need to price them in rather than out. Looks like we have a general demand problem that can only mean much lower price levels on all commodities which is what charts and volatility are telling us.



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