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Biodiesel premium collapsing in Europe as Gasoil has spiked +46% in last 3 months

FAME and UCOME premium over gasoil in Northwest Europe dropped to +210 and +535 respectively on the spot market which is 46% less for F0 and 22% less for UCOME than on Aug 31. These market are not for the faint hearts. Gasoil expiry tmrw may have something to do with continued strength as navigation continues to be difficult on Rhine river as water level continue to decline. Biodiesel screen-crush margin remains -1.27/gal, still well compensated by RINs that stand at 1.33/gal today. Still you do have to finance these RINs upfront. Vegetable oil market are under pressure this Monday in Europe as crops are moving into crushing and oil is plentiful everywhere despite indicated prices. First frost not in sight this Sep as nighttime temps in upper midwest remain high so no threats there to what is likely to be a US bumper crop.

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