No Bids, No Normal

For biodiesel and RD traders, today was not about crude being down. WTI Jul fell $1.78/bbl to $74.82 and Brent Aug fell $0.90/bbl to $77.00, but gasoil Jul rose $12.00/mt to $890.75 and heating oil Jul rose 4.03 c/gal to $3.1334. Gasoline is carrying the deflationary headline, with US retail prices down for a sixth straight week and 15% below the May peak, while RBOB Jul fell 0.90%. The deflationary tone also reached gold, down $59.80/oz or 1.42%, and soybean oil, with Jul down $10.80/mt to $1,557.77. Yet diesel did not follow, and gasoil Jul/Dec backwardation bounced to $85.25/mt, up $7.75 from $77.50/mt. That confirms the diesel curve is no longer softening even while crude, gasoline, gold and soybean oil traded lower.

Gasoil Jul/Dec

Indian Oil receiving no bids for a tender of Gulf cargo vessels is the clearest physical signal that the next 60 days are not normal. The tender included a VLGC for 45,000 mt of LPG, a VLCC for 2 million bbl of crude, and a Suezmax for 1 million bbl, all tied to loadings from ports inside or around the Strait of Hormuz. Tanker crossings through Hormuz were only 14 on Jun 23, including 6 crude tankers, 4 chemical/products tankers, 3 LNG tankers, and 1 LPG tanker, far below the 60 to 80 daily crossings seen before Feb 28. Implied Hormuz flows recovered to 13.1 million bbl yesterday, with the 7-day average rising to 8.1 million bpd, but that recovery sits beside the failed freight tender, not against it. Phillips 66 said 90 to 100 million bbl of crude remain trapped around the Strait and described normalization as a long process. The SPR at 331.2 million bbl is only about 16 to 19 days of US supply, depending on whether we measure it against total petroleum demand or crude refinery runs, which makes the Apr-Jun releases a cushion, not a reset.

SPR

The US biofuel screen was the cleanest biodiesel/RD signal on the day. Bean oil as a percentage of gasoil fell to 174.59% for Jul, down 2.19%, and 174.45% for Sep, down 1.84%, because gasoil rallied while soybean oil slipped. The RD screen crush jumped to 45.28 c/gal, up 9.35 c/gal or 26.01%, while the conventional biodiesel screen moved to 91.54 c/gal, up 8.86 c/gal or 10.71%. BOHO eased to 216.54 c/gal, down 7.78 c/gal, and BOGO fell to $666.80/mt, down $23.02. D4 RINs remain the anchor, with Dec26 at 2.449 and Dec27 at 2.480. Lower soybean oil, stronger heating oil, stronger gasoil structure and firm D4 RINs all moved in favor of biodiesel/RD margins.

D4 RINs

The feedstock side is easing versus last week, but it has strengthened significantly versus a few weeks ago. Paranagua soybean oil basis has weakened back from last week’s unusually strong -650/-700 area to -1500/-1750 for July and -1540/-1740 for Aug/Sep, but it is still much stronger than the -2000 to -2500 area seen a few weeks ago and far from the -3000 level needed to force aggressive US import pressure. US soybean conditions were unchanged at 66% good/excellent, while export inspections were only 8.9 million bushels versus estimates of 11.0 to 20.2 million bushels. China imported 11.8 mmt of soybeans in May, up 39.1% from April but down 15.3% from last year, with Brazil supplying 84.4% of May arrivals. Brazil’s 25/26 soybean crop estimate is 182.2 mmt, and the export program is 77.4 mmt, up 2.9 mmt year on year and 3.6 mmt week on week. Brazil also shipped 1.1 mmt of soybean meal to Iran in Jan-May, already 84% more than all of 2025, while Brazil’s Jan-May soybean exports to Iran fell to a five-year low. Iran is part of protein and freight flows too.

Brazil Soymeal Exports to Iran

Europe was not weak enough to give RD or biodiesel shorts comfort. Northwest European gasoline cracks softened to $28.70/bbl, down $2.40/bbl, but the ARA biodiesel paper market stayed active. UCOME traded 105 kt, with Q3 at 703, up 18, Jul at 700, up 15, and Q4 at 700, up 15. RME/FAME traded 38 kt, with Jul-Aug at 37, up 7, Aug at 32, up 2, and Q3 at 40, down 5. HVO II traded 17.6 kt, with Q4 at 1775, down 20, and Aug at 1818, down 22. The London sheet had Jul RME at $1,467/mt midpoint, Jul FAME 0 at $1,427/mt, Jul UCOME at $1,577/mt, and Jul HVO at $2,727/mt. Soft oils also stayed firm, with Dutch soybean oil at 1,140 euros/mt for Jun and Jul, German soybean oil at 1,155 euros/mt for Jun and Jul, and Dutch rapeseed oil at 1,280 euros/mt for Jul. Palm is not giving Europe a bullish feedstock push either: recent CPO color showed Q3 CPO at $1,151/mt, down 1.22%, Q4 at $1,168.75/mt, down 1.00%, and BOPO Q3 at $508.39/mt, down 5.23%, while energy buyers were still visible in the swap market. Europe is still competing for certified molecules and credits, even with palm under pressure.

The Senate farm bill draft added a policy wrinkle by leaving out a permanent E15 fix, but this is not an immediate loss of E15 availability. EPA is already keeping summer E15 in the market through emergency waivers that need renewal every 20 days under the Clean Air Act. The issue for compliance traders is policy durability: the market still has a rolling waiver bridge rather than a permanent statutory solution. With RBOB Jul down 0.90% and the RBOB/ethanol premium narrowing to $1.1300/gal, down 2.33%, the ethanol blend economics still matter for nested RIN demand. The wider market is trying to price relief, but today’s biodiesel/RD signal is still constraint: no bids for Gulf freight, gasoil backwardation bouncing, D4 RINs firm, and Paranagua basis not weak enough to break the US island.