Flat price Gasoil is down $64/mt since jul 1 while backwardation weakens despite tighter stocks world wide. Obviously there is a demand issue that spreads are clearly reflecting. Biodiesel is reflecting the same pattern with flat price F0 down $136/mt to $1081/MT in Northwest Europe. Biodiesel reflects last week major adjustments in vegoil prices. Gross margins on F0 have weakened dramatically to +$23/mt while on RME there is still +$89/mt while on UCOME gross margin are still +$245/mt in ARA as UCOME is the product that took the least flat price drop (down $54/mt) since Jul 1. The large drop in Soyoil futures is now finally affecting premium in Paranagua as they are down to -50 offered with -100 bid but we are hardly running out of beans. have we bottomed yet in gasoil or bean oil? With Heat crack still in the $20/brl it would appear that we have to go test $700/mt gasoil soon. Bean oil is more a function of global soybean S&D and it does not look great. This is why we see in Congress a new bill to renew the BTC and strong lobbying by the Soy crushing industry to put a stop to UCO imports from China.
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