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Gasoil tires near expiration, BOGO up 10% today, Germany exceeding Biodiesel mandate like US

Sep Gasoil expired at 1011.75 while Oct expired at 889.25, we are now looking at testing support 50DWMA 844.11. Gasoil will expire Thursday. Backwardation to April is a bit lower at $72.50 but still off the lows of Oct 30. FAME premium are also off the lows of +155 over ICE last thursday but still trading $85/mt below BOGO. Winter biodiesel (RME) at $1164 spot still showing $136/mt of Gross margin Vs replacement RSO. Soyoil in Northwest Europe remains stubbornly supportive at 20Euro above Rapeseed oil and $178/mt above Sunflower oil. This may be explained by healthy exports of Biodiesel from Germany to US reported by UFOP that amounted to 823kt in the first half of this year. Interestingly with 1.733 Million MT of biodiesel and HVO blended in Germany in that same period, it will therefore be easy to reach the 3.0 Mil MT target and therefore UFOP has been lobbying for increasing the German mandate from 7 to 10% to support crushers instead of the mandate 9.25 that is already scheduled since Germany already achieves 8.4% blend so easily. It would appear that over-reaching Biodiesel/HVO mandates has now spread from US to Germany.

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