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BOGO down 38.5% in the last 3 months reflecting ample feedstock supplies

Although down significantly, BOGO is still up $100/mt since the beginning of Nov mostly about concerns of the South American crop although clearly if you add Brazil/Argentina/Urug/Par you are still at ~ 220 Million MT - hardly a huge problem for the world after a solid US crop and world stock-to-usage ratio of 29.85%. Last time we were here, soybean prices were considerably lower. Biodiesel F0 premiums in Europe is still trading at $100/mt discount to BOGO while flat price is showing a slight contango through Q2. Winter Biodiesel gased on Rapeseed oil has flattened through Q1 but still showing a flat price backwardation of $24/mt through Q2. Interestingly Rapeseed oil remains the cheapest soft oil in Europe and Gross Biodiesel margins show a healthy $164/mt guaranteeing a steady supply. UCOME on the other hand has deepened its contango to $34/mt flat price through Q2 as UCO supplies seem plentiful and demand poor during winter season. It should be noted that the bulk of UCO exports out of China are now headed to US especially with the impending 45z rule. RINs seem to be holding despite the odds as recent Federal court news that Small Refinery Exemptions were back on adding 200-400 Million gallons and perhaps more multi-year. This happening with a backdrop of excess RINs generation in the US. The combination of both ample feedstocks, RD capacity and new US producer subsidies in the new year adds to my conviction that RINs and premiums in Europe will continue to be pressured.

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