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BOGO making new lows despite Gasoil cracks making new high


Rains in Argentina and a monster crop in Brazil is weighing on Soybeans and Soyoil. Anecdotal reports from harvest reports in Brazil showing record yields while it has been raining in Argentina. We are also seeing Soyoil premiums in Brazil weakening together with futures. Baltic Dry Index showing that Freight values are also falling dramatically which can only mean China demand for dry cargo not great as BDI making 2008 lows...

Bean oil as a coefficient of Gasoil is now 1.35 a new low as it is not following diesel as new soy fundamentals seem to overwhelm. FAME traded on Friday $72/mt below average of the month as liquidity focused on RME in Northwest Europe with producers enjoying good margins. Gasoil Feb/April backwardation has now grown 45.54% in the last 3 months to $73.50/mt while Brent Mar/Apr is still in a slight contango. Strong Gasoil/Diesel usually a telling sign of widening geopolitical tensions while BDI and barge freight in Europe indicating poor demand.

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