Biodiesel Window Defies August Lull as UCOME Commands Premium

Despite the prevailing summer slowdown, the biodiesel window market was surprisingly active today in Northwest Europe. UCOME traded up to $772/mt, with a firm flat price of $1,452.93/mt and a UCOME/FAME spread holding strong at 102.10. Gross margins remain attractive for producers, with UCOME delivering an estimated $192/mt, RME yielding about $107/mt, and FAME (F0) at approximately $63/mt — suggesting continued supply-side incentive, even as flat prices remain far above diesel.

FAME itself traded at $667.83/mt, while RME posted at $684/mt, pushing the RME/FAME spread to 16.17. Although cracks and flat prices are not favorable for discretionary blending, the tightness in low-CI supply and structurally supported premiums — especially under the 45Z regime in US — appear to be sustaining short-term demand.

Still in Europe, ICE canola drifted lower on weak soyoil sentiment. Yet physical offers held firm: rapeseed oil for ASO lifted to €1,045/mt FOB Rotterdam, and sunflower oil for September rose to $1,265/mt FOB, supported by tightness in Black Sea flows. Paper activity, however, remained light across the board in biodiesel swaps and ICE gasoil, with traders clearly stepping away amid peak holiday schedules.

In the U.S., producer economics remain under pressure. Screen-based biodiesel crush margins have deteriorated sharply, now well into negative territory at around −$0.43/gal, despite D4 RINs ticking back up to $1.21. The sustained high cost of soybean oil is largely to blame, with futures still above 53 c/lb and basis levels firming across South America. While spot flat prices in the physical market continue to trade at a premium, very few independent producers are likely operating profitably without backward integration or blender credit arbitrage.

Screen Biodiesel Crush Margin

Underlying this resilience, structural shifts in the upstream supply chain may be playing a role. In the U.S., Eazy Grease has merged with LRS to expand its used cooking oil (UCO) collection footprint, in a deal that signals growing consolidation within the feedstock supply chain. Such moves may tighten domestic feedstock availability just as North American origin restrictions under 45Z are steering demand inward.

On the macro side, Brazil’s Grupo Potencial announced a $392 million investment in a new corn ethanol complex, reaffirming Latin America’s continued commitment to renewable fuels. Malaysian CPO also rebounded 2.46% to RM 4,290/mt amid short-covering and firm Indian demand, with CFR prices reported between $1,120–$1,130/mt for August delivery.

Beyond the physical flows, one of the quietest but most important stories may be the lack of progress in U.S.–China soybean negotiations. As the Agrinvest chart shows, spreads on Brazil-to-China soybeans fluctuate widely — from 97 to 125 c/lb — highlighting how traders are uncertain about future tariff scenarios and how to price forward deliveries.

Soy Spreads Brazil Vs US

Finally, with Congress in recess until early September and broader markets in holiday mode, this may be the quietest stretch of the summer — but today’s window action shows that structural and feedstock dynamics are far from asleep.