Looking for buyers even in Europe where Soybean oil now finally narrowing premium to Rapeseed oil to $55/mt but still showing an inverse of $22/mt through April. Sunflower oil remains the cheapest soft oil in Europe at $1014/mt (especially when you compare that to Soyoil futures in Chicago at $1097/mt) and showing a contango of $6/mt through April. What is odd in Europe is that the most premium oil (SFO) and the cheapest oil Palm Olein are showing contango structures while all others are inverted. Considering that Soybean stock to usage ratio is at 30% and crush margin are showing a healthy 1.40 c/bushels, you would think that Soybean oil would also develop a contango but it is still showing a .40 c/lbs inverse through Mar24! Meanwhile in Biodiesel, RME gross margin on Rapeseed oil are now showing +$196/mt but since most of the Winter Biodiesel deliveries are now mostly finalized through Jan24, it would indicate that we could see some further pressure in an otherwise very orderly demand market as oilseed stocks in Europe remain high. Considering that Winter biodiesel premium are $137/mt higher which is not that high, it would mean that continued steady demand for RME will continue on any RSO weakness. This will leave all the other soft oils in a demand conundrum as US ramps up Useed Cooking oil imports at expense of Soyoil in early 2024. This is probably why the Minister of Energy and Mines in Brazil proprosed at COP28 to raise the mandate for Biodiesel to 25% from current 12% but there are a lot of political obstacles to such an increase in the short term.
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