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Diesel contango widens to double digit through Sep


Golden week in Asia is over and yet ICE gasoil cracks are unchanged but product contango is much wider led by Europe ICE gasoil. Gross margins in Biodiesel narrowed a bit in Northwest Europe on account of a recovery in Soyoil which took BOGO higher to nearly +210. FAME premiums in NWE still showing a $200 premium VS BOGO. RME/FAME spread narrowing further to only +12. Heavy rains in the South of Brazil in the last 10 days have not only slowed down tail end of harvesting in the south of Brazil but also hampered loadings in Paranagua. Premium for Soyoil are now bid at -690 with offers at -590 with still very wide bid/ask. Brazil soy harvest is over while Argentina harvest is now just over 35% completed when it should already be 50% but with better weather it is still expected to yield 51 mil MT. Argentina strikes in crushing industry having little impact. EIA has produced a remarkable graphic showing how renewable diesel and biodiesel supply availability has changed distillate demand in the last 13 years.



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