Spain drags Europe Biodiesel lower and China buying of US Soy Fading
The striking feature in markets today is the continued structural deterioration in soybean oil forward spreads. The Dec/May and Dec/Jul carries are now widening again, with the one-year structure approaching levels that imply +900% to +1000% widening over the last three months. The market is sending a clear signal: Chinese buying of U.S. soybeans is deteriorating rapidly, the policy backdrop remains hostile, and FOB premiums in Brazil for new-crop soybean oil (now near –700) confirm that global fundamentals are softening rather than tightening. Something is breaking beneath the surface, and unless trade flows normalize, this imbalance may spiral further.
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