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Bean oil futures have destroyed Biodiesel crush margins for Q4


Bean oil as expressed as a % of Gasoil has reached 1.85 up nearly 18% in last 3 months. Although prior to this spike, we can deduce that many Renewable Diesel players locked-in margins at least through end of Q3 as Dec futures showing 16.4% inverse or backwardation. Although NOPA reported decent Bean oil stocks at 1.767 Billion lbs or 800,000MT that was on bottom of expectations despite record Jun crush as Renewable diesel ramping up this quarter. We can expect this trend to continue through Sep - strong monthly crush and higher usage of Soyoil. Since Soy crop was planted early, we should expect early harvest this year and along these lines, the classification of Soybeans of other colors was removed from USDA classification as use of genetically modified E3 seeds reached >45% of Soy planted this year and is more likely to be off color (green). This is not the end of this story as Global stock-to-use ratio is at all time high of 31.46% and color of Soya will inevitably impact exports and further encourage domestic crushing = lower soy oil prices


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