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Gasoil options open interest show a strong bullish bias and BOGO down 46%

Gasoil moved quickly from 845.50 after lifting of the Russian export ban but are now back up above $900 and still below late Sep values. Winter Biodiesel RME premium stunned by underlying volatility are back to +430 over ICE Gasoil after hitting a high of +493 in the last week. FAME premium don't know where to go and back at +263 while UCOME (waste based biodiesel) has been stuck at the +508 range since its flat price value of $1378 is a bit disconcerting for buyers vs FAME flat price of $1133/mt. Still we are only $100/mt from the highs we made at the end of Sep. Nothing has changed in terms of navigation in Europe with Rhine river making new record lows (by the way same with St Louis - Mississippi river making another new record low at -1.88ft). BOGO is now down 46% in the last 3 months to +$334 yet FAME trades $70/mt lower. US growing season is over in US and harvest progress is now over 20% while South American planting progress is >10%. Trade has turned bearish on Soybeans. Ukraine oilseeds crop coming in much larger than expected on all oilseeds - can't be good for European prices of Sunflower oil yet we still see in excess of $150/mt backwardation in Rapeseed oil but margin spread is narrowing now to $115/mt which is not enough to cover transformation costs. In Asia and particularly in Malaysia, palm oil stocks came out as expected but could have been much higher if not for unusual domestic consumption in Sep. Nevertheless, the tsunami of vegetable oil is certainly still on the way one way or another while Gasoil feels like it could spike or simply hold here on tight supplies depending on geopolitics as demand especially in Europe remains sluggish.

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