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Gasoil weakness continues while biodiesel margins still well supported on both sides of the Atlantic

Gross margin on Biodiesel is still well supported in NorthWestEurope on FAME0 is at $255/mt while on RME it is $160/mt. Soyoil being the cheapest soft oil in NWE at $100/mt discount to Rapeseed oil. F0 Premiums now trading at 2X BOGO which is rather exceptional. Meanwhile in US record RD production and imports still the theme and would expect continued strong production and imports with RINs rising to 0.57 c/gal. Nearby summer driving contango in Gasoil still about -$7/mt to sep while on HO it is -6 c/gal. Rather difficult to imagine that current backwardation of Gasoil post-Sept is sustainable (sep/dec is +5.75). Additionally last part of the year will also bring a lot of vegoil to markets and with Ukraine grain exports jumping +67% to 5 mil Mt this May, makes me think that Sunflower oil prices in Europe at $1050/mt FOB dutchmill is unsustainable bringing renewed weakness to Europe's vegoil markets.

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