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Markets in Turmoil: Bean oil falls $40/mt below FAME0 in EU

Mar BOGO expired at $459 while FAME 0 trading spot in Northwest Europe at +440 for delivery through Apr6. In the last month we have seen FAME0/Bean oil spread move from even money to -$40 as premiums getting pressured because of poor biodiesel demand in Europe. However it is not only the spot that is getting pressured as even the back of the curve is showing an average bean oil discount to FAME0 of -$86/mt. Similarly for Rapeseed Methyl Esters (RME) which is a winter biodiesel, we have seen margins drop from $200/mt to $50/my on a spot basis as Rapeseed oil remains the cheapest soft oil in Europe by at least 100Euro/MT. Like for FAME0 we see RME producer margins drop dramatically through end of q3. So what we see is a deteriorating spot environment with a curve telling us that it is going to get worse through end of q3.

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