Volatility Unleashed: Biodiesel Holds Steady Amid Gasoil Collapse

A brutal correction in energy markets sent ICE gasoil tumbling nearly 10% to $670/mt, underscoring the savage volatility gripping distillates. The technical picture for gasoil is unambiguously weak, with the chart breaking firmly below its 20-day weighted moving average.

Gasoil

In contrast, soybean oil futures on the CBOT, while volatile, are still hovering above their 200-day weighted moving average, offering a more constructive technical signal—at least for now.

Soybean Oil

BOGO surged 11% today, trading at +477, likely responding to the dislocation between energy futures and vegetable oil values. Paranagua soyoil FOB appears to have found its footing again at -380 under CBOT for July, suggesting physical supply pressure is easing. The soybean harvest in Argentina is reportedly 81% complete according to Bolsa, aligning with seasonal norms and setting the stage for better export flow visibility. Meanwhile, in the U.S., soybean crop conditions held steady at 66% rated good-to-excellent, though regional disparities are evident, with deterioration across key I-states partially offset by improvements in the Delta.

The oilseed complex as a whole is shaping up to be decidedly bearish. Russia is on track for a record sunflower crop with 17.5 million tonnes forecast on steady acreage, while Ukraine, despite a smaller crop, continues to export aggressively into Europe under favorable duty regimes. In soy, both Argentine harvest progress and U.S. field conditions point to solid fundamentals. With sunflower oil still undercutting other soft oils and rapeseed values easing along the curve, the feedstock outlook is increasingly heavy and could put downward pressure on biodiesel margins if energy markets don’t recover.

Meanwhile, RED III implementation remains stalled across most of Europe. Although the directive entered into force in November 2023, most Member States have missed key transposition deadlines—including the main May 2025 implementation date. The Commission has begun infringement proceedings, but investor uncertainty lingers, especially in sectors like renewable hydrogen and permitting for advanced biofuels. Tensions are also mounting over unresolved disputes on double counting provisions, which continue to distort compliance metrics and market incentives. Added to this, delays in the full rollout of the Union Database (UDB) are fueling frustration within the Commission and among obligated parties. The next milestone—designation of Renewables Acceleration Areas by February 2026—remains on the horizon, but implementation credibility is under pressure.