The RFS Island Meets Harvest
- Henri Bardon
- 3 days ago
- 5 min read
The US soybean harvest should be running hard within the next three weeks, and I expect a large share of those beans to move quickly toward processors. July crush already reached a record 221.9 million bushels and December crush margins, despite falling today, remain around $2.39/bushel. Soybean oil itself is giving almost no shortage signal. September is around 71.05 c/lb, December 70.94 and January 70.96. More importantly, the Oct-Jan spread has moved from more than 1.5 cents/lb backwardated earlier this year to roughly 0.35 cents of carry today. That gives me pause. The market has gone from paying a premium for nearby oil to paying storage into January just as harvest and crush are about to accelerate. For a market facing supposedly exceptional Q4 biofuel demand, that is a weak physical signal.
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