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Renewable diesel production exceeds RFS requirements

Notwithstanding the fact that most renewable diesel is sold in California/Oregon, EPA has announced that in May we exceeded production of RINs at 2.11 Billion Vs required Renewable volume obligation requirements of only 1.77 Billion monthly or 21.19 Billion Gallons for this year. Yet despite this situation we continue to see high RINs value buoyed by higher feedstock prices and continued ramp up of Renewable Diesel production. Bean oil has now reached nearly 1.9X the price of Gasoil yet we are clocking record production in Soybeans in South America and US while facing difficulties with export of Soybean to China. Soyoil prices in Brazil FOB Paranagua are offered for Aug at -2000 while best bid is -2250 even O/N/D best bid is -1800! In Europe BOGO reached +722 which is an increase of 51% in the last 3 months while FAME 0 traded in window at +526. is the feedstock spike of the last 3 months +25% in Soyoil overdone? I think so.

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